The USEconomy Is Experiencing Large Trade Deficits

question 40

Multiple Choice

The U.S.economy is experiencing large trade deficits.Suppose that the U.S.considers devaluing its dollar against a foreign currency to improve the trade balance.What type of currency contracting would improve the U.S.trade deficit?

• A) The U.S. import contracts are written in foreign currency and the U.S. export contracts are written in dollar.
• B) The U.S. import contracts are written in dollar and the U.S. export contracts are written in foreign currency.
• C) Both of the U.S. import and export contracts are written in dollar.
• D) Both of the U.S. import and export contracts are written in foreign currency.

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Definitions:

Economic Factor

An element that influences the performance or outcomes of an economy, such as interest rates, inflation, or unemployment rates.

PEST Analysis

A strategic business tool used to identify and analyze the Political, Economic, Social, and Technological factors that may impact a project or venture.

Offshoring Backlash

A negative response or movement against the practice of moving jobs and services to other countries to benefit from lower costs.

Political Factor

Refers to governmental influences that can affect the operation and profitability of businesses, including laws, policies, and political stability.