What Does It Mean When a Country's Trade Balance Is

question 49

Multiple Choice

What does it mean when a country's trade balance is zero?

• A)It means that no foreign countries wish to purchase its exports.
• B)It means that the country is exporting more than it is importing.
• C)It means that the economy is importing exactly as much as it exports.
• D)It means that countries that owe the country money for its exports still need to pay up.

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Definitions:

Luxuries

Luxuries refer to goods or services that are considered non-essential but desirable and are often associated with higher quality and price points than necessities.

Price Elastic Demand

Describes a situation where the quantity demanded of a good or service significantly changes in response to a change in its price.

Close Substitutes

Goods or services that can serve as replacements for each other with little loss of utility to the consumer.

OPEC Oil Cartel

An international organization of oil-producing countries that coordinates and unifies the petroleum policies of its member states to stabilize oil markets and prices.