If a Country's Government Wants to Eliminate a Trade Deficit

question 52

Multiple Choice

If a country's government wants to eliminate a trade deficit, its most effective policy would be to

• A)reduce tariffs.
• B)encourage imports.
• C)impose quotas on imports.
• D)reduce its budget deficit.

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Definitions:

Private Good

A product or service that is exclusively owned and consumed by the individual or entity that purchases it, characterized by rivalry and excludability in consumption.

Excludable

A good or service is considered excludable if it's possible to prevent non-paying consumers from accessing it.

Rival

In economic terms, a good or service that cannot be enjoyed or consumed by more than one person at the same time.

Artificially Scarce Good

A product or service whose supply is deliberately limited, often to maintain high prices or for other non-market reasons.