When the Balance of Trade Is in Balance, We Know

question 35

Multiple Choice

When the balance of trade is in balance, we know with certainty that

• A) the value of all debit transactions equals the value of all credit transactions.
• B) the value of exports of goods equals the value of imports of goods.
• C) the value of capital exports equals the value of capital imports.
• D) the value of exports of goods and services equals the value of imports of goods and services.

Recognize the effect of fiscal policies on national saving, interest rates, and investment.

Analyze the impact of automatic stabilizers on budget deficits.

Evaluate the relationship between federal budget deficits and trade deficits.

Grasp the implications of discretionary fiscal policy on the economy.

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Definitions:

Consideration

A fundamental concept in contract law, referring to something of value that is exchanged between parties as part of an agreement.

Gratuitous Promise

A promise for which no consideration is given and which is not legally binding.

Conditional

Something that is subject to one or more conditions or requirements being met before it becomes fully effective or binding.

Future Events

Events or occurrences that have not yet happened but are expected or predicted to happen in the future.