If a Country Has a Trade Deficit

question 24

Multiple Choice

If a country has a trade deficit

• A)it has positive net exports and positive net capital outflow.
• B)it has positive net exports and negative net capital outflow.
• C)it has negative net exports and positive net capital outflow.
• D)it has negative net exports and negative net capital outflow.

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Definitions:

Cash Flows

The total amount of money being transferred into and out of a business, especially as it affects liquidity.

Investing Activities

Financial transactions involving the purchase or sale of long-term assets and investments, a component of cash flow statements.

Operating Activities

Operating activities are the day-to-day functions of a business related to producing and selling its goods or services, which are reflected in its earnings.

Noncash Financing

Financing activities that do not involve cash flows, such as issuing stock for assets or converting debt to equity.