Suppose a Country Is Currently Experiencing a Trade Deficit

question 25

Multiple Choice

Suppose a country is currently experiencing a trade deficit.In the long run,this could be self-correcting if

• A)the deficit exists because of the import demand for capital goods.
• B)the deficit exists because of the import demand for consumption goods.
• C)the deficit exists because foreigners want to buy the country's currency as an investment.
• D)none of the options