The UStrade Deficit Is Most Likely to Be Harmful in the the Future

question 24

Multiple Choice

The U.S.trade deficit is most likely to be harmful in the future if:

• A)U.S.citizens continue to accumulate foreign assets.
• B)U.S.production continues to exceed U.S.consumption.
• C)the inflow of financial capital associated with it does not finance productive investment.
• D)U.S.citizens refuse to lend to foreigners as a result of it.

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Definitions:

Capital Balances

Refers to the amount of money that the owners of a company have invested in it.

Goodwill Method

An accounting method used to determine the value of a non-tangible asset acquired when one company buys another.

Profits and Losses

Financial terms representing the positive or negative financial outcomes resulting from a company's operations and activities.

LLP

Limited Liability Partnership, a partnership where some or all partners have limited liabilities, protecting individual partners from the debts of the partnership.