If a Nation Is Running a Trade Deficit, It Is

question 130

Multiple Choice

If a nation is running a trade deficit, it is

• A) spending more on public services than it is raising in tax revenues.
• B) worse off as the result of its trade with foreign countries.
• C) importing more goods and services than it exports.
• D) encountering a balance of payments disequilibrium.

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Definitions:

Opportunity Cost

The cost of forgoing the next best alternative when making a decision, representing the benefits one could have received by choosing differently.

Pizza

A popular dish of Italian origin, consisting of a flat, round base of dough baked with a topping of tomato sauce and cheese, often with added meat, fish, or vegetables.

Beer

An alcoholic beverage made from barley, hops, water, and yeast through a fermentation process.

Pints

A measure of volume often used for liquids, approximately equal to half a liter or 16 US fluid ounces.