Which of the Following Is True About How Trade Deficits

question 134

Multiple Choice

Which of the following is true about how trade deficits and government budget deficits are related?

• A) The trade deficit leads to a reduction in investment that leads to a government budget deficit.
• B) The trade deficit leads to a decline in imports relative to exports that leads to a government budget deficit.
• C) The government budget deficit leads to higher interest rates that will lead to a trade deficit.
• D) The government budget deficit leads to lower interest rates that will lead to a lower trade deficit.

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Definitions:

Issue

A subject or problem that is under discussion or over which there are opposing views or disagreements.

Common Law

A legal system based on court precedents and judicial decisions rather than statutory laws, providing a framework for adjudicating cases.

Court-Made

Refers to legal doctrines, laws, or interpretations that have been established by judicial rulings rather than by legislative statutes.

Holding

A court's determination of a matter of law pivotal to its decision, serving as an authoritative ruling.