The Situation That Results When a State Buys More from Abroad

question 27

Multiple Choice

The situation that results when a state buys more from abroad than it sells is known as a(n)

• A)devaluation.
• B)floating exchange rate.
• C)managed exchange rate system.
• D)balance-of-trade deficit.
• E)inflation.

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Definitions:

Market Failure

An instance where goods and services are distributed by an unregulated market in a manner that is not optimum, frequently causing a reduction in the total wellbeing of society.

Public Sector

The part of an economy that is controlled by the government, including public services and enterprises.

Capitalist Societies

Social systems that rely on private ownership of the means of production and operate on profit and market competition.

Political Power

The ability or authority to influence people's behavior or the course of events, often used within the context of government, organizations, or societies.