The Trade Deficit Is the Mirror Image of the Required

question 184

Multiple Choice

The trade deficit is the mirror image of the required capital inflows.So why worry about these capital inflows?

• A)Trade deficits automatically cause larger budget deficits.
• B)Before long, the Germans, Japanese, and other foreigners will own the United States and will be dictating policy to the U.S.government.
• C)These capital inflows create debts on which interest and principal payments will have to be made in the future.
• D)During the period of trade deficits, personal consumption must be reduced to build up wealth to repay the debt created.

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Definitions:

Functional Strategies

Specific strategies targeting the operations and objectives within a particular business function, such as marketing, finance, or production.

Competitive Strategy

A long-term plan formed by a company to gain an advantageous position over its competitors, typically involving efforts to offer unique value to customers.

Intercompany Scope

The extent of activities, transactions, and engagements that take place between different entities within the same corporate group or parent company.

Strategic Fit

The alignment between a company's strategies and its external environment, including markets, competition, and regulations, to ensure effectiveness and enhance performance.