The United States Is Called a Debtor Nation Because

question 130

Multiple Choice

The United States is called a debtor nation because

• A)it has a large current account deficit and is simultaneously funded by foreign investment.
• B)it has a large financial account deficit that is used to fund the current account deficit.
• C)it has a large balance of payments deficit that is used to fund the current account deficit.
• D)U.S.capital outflows are much greater than U.S.capital inflows.

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Definitions:

Invisible Hand Principle

Adam Smith's concept that self-interested behaviors in a free-market economy lead to economic benefits for all.

Competitive Markets

Markets characterized by a high level of competition where no single buyer or seller can influence prices significantly, leading to efficient distribution of resources.

General Welfare

General welfare refers to the overall health, prosperity, and happiness of a population.

Invisible Hand Principle

Adam Smith's concept that individuals' self-interested actions can lead to positive social and economic outcomes, guided as if by an invisible hand.