If We Import More Than We Export from the Rest

question 124

Multiple Choice

If we import more than we export from the rest of the world we

• A)are a net borrower of funds from the rest of the world.
• B)are a net lender of funds to the rest of the world.
• C)are running a trade surplus.
• D)are helping to finance investment in the rest of the world.
• E)have a surplus of funds at the world equilibrium interest rate.

---

Definitions:

Price Discrimination

A selling strategy where a provider charges different prices for the same product or service to different customers, not based on the cost of production.

Arbitraging

The process of buying and selling assets across different markets or in different forms to exploit price differences for profit.

Vertical Integrate

A strategy where a company expands its business operations into different steps on the same production path, such as when a manufacturer owns its supplier and/or distributor.

Free Riding Problem

A situation in which individuals benefit from resources, goods, or services without paying for them, leading to under-provision or depletion of those resources.