If the Value of a Nation's Merchandise Imports Exceeds Merchandise

question 82

Multiple Choice

If the value of a nation's merchandise imports exceeds merchandise exports, the nation is running a

• A) balance of payments deficit.
• B) balance of payments surplus.
• C) merchandise trade deficit.
• D) merchandise trade surplus.

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Definitions:

Deadweight Loss

A loss of economic efficiency that can occur when the equilibrium for a good or a service is not achieved or is not achievable, often due to market failure or intervention.

Potential Level

The capacity of an economy to produce goods and services when at full employment, indicating the maximum sustainable output level.

Actual Output

The quantity of goods and services produced within an economy at a specific period, reflecting the economy's current production level.

Resource Unemployment

Refers to the state where economic resources are not being used to their full potential, contributing to less-than-optimal output or employment.