Suppose the United States Experiences an Increase in Its Trade

question 144

Multiple Choice

Suppose the United States experiences an increase in its trade deficit.Which of the following is a possible explanation for this growing trade deficit? There has been a(n)

• A) decrease in U.S.interest rates.
• B) increase in the U.S.savings rate.
• C) economic expansion in the United States.
• D) decrease in the U.S.budget deficit.
• E) increase in foreign interest rates.

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Definitions:

Share Capital

The amount of money raised by a company through the sale of shares to investors, representing ownership in the company.

Retained Earnings

The portion of a company's profits that is kept or retained and not paid out as dividends to shareholders.

Secondary Market

The marketplace where investors buy and sell securities or assets from other investors, rather than from the issuing companies directly.