A Trade Surplus Occurs When

question 12

Multiple Choice

A trade surplus occurs when

• A) a country purchases more from abroad than other countries purchase from it.
• B) a country sells more abroad than it purchases from abroad.
• C) a country's firms open more stores abroad than foreign firms open in the country.
• D) foreign firms open more stores in a country than the country opens in foreign countries.

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Definitions:

Substitutes

Goods or services that can replace each other in use, where an increase in the price of one leads to an increase in demand for the other.

Inferior Good

A type of good for which demand decreases as the income of consumers increases.

Demand Curve

A diagram that shows how the quantity of a product demanded by buyers changes according to its price.

Demand Curve

A graphical representation showing the relationship between the price of a good and the quantity of that good that consumers are willing to purchase at various prices.