Suppose a Country Is Currently Experiencing a Trade Deficit

question 63

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 above

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Definitions:

Denial

In psychoanalytic theory, the defense mechanism that allows the mind to deny that a current source of anxiety exists.

Defense Mechanism

Psychological strategies used unconsciously by individuals to protect themselves from anxiety arising from unacceptable thoughts or feelings.

Neo-Freudian Psychologist

A psychologist belonging to a movement that adapted and extended Freud's theories, focusing more on social and cultural factors for personality.

Collective Unconscious

Carl Jung's concept of a part of the unconscious mind that is derived from ancestral memory and experience and is common to all humankind.