A US Trade Deficit Will Cause All of the Following Phenomena

question 104

Multiple Choice

A U.S. trade deficit will cause all of the following phenomena except:

• A)U.S. assets will have to be sold to foreigners.
• B)future interest and profits from assets sold to foreigners must be paid to them.
• C)future consumption must decrease to pay for the current excess of imports over exports.
• D)production must eventually increase.

---

Definitions:

Statement of Cash Flows

A financial document that provides a summary of the amount of cash and cash equivalents entering and leaving a company, showing how the company raises and spends money.

Profit and Loss Statement

A financial document summarizing the revenues, costs, and expenses incurred during a specific period, typically a fiscal quarter or year.

Income Statement

A financial document that reports a company’s revenues, expenses, and profits over a specific period.

Statement of Changes

A financial document detailing how an entity's equity has changed over a period of time due to various business activities.