Suppose the U

question 177

Multiple Choice

Suppose the U.S.Congress is successful in enacting tariffs large enough to eliminate the current account deficit.What would happen to the level of domestic investment?

• A)It would not change.
• B)It would rise and exceed national saving.
• C)It would rise to a level equal to net foreign investment.
• D)It would fall to a level equal to national saving.

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Definitions:

Real GDP

Gross Domestic Product adjusted for inflation, measuring the value of all finished goods and services produced within a country's borders in a specific time period.

Military Aircraft

Aircrafts designed for use in warfare, including fighters, bombers, and transport planes.

GDP Deflator

A gauge for assessing the price rates of all new, locally manufactured, end goods and services in a country, applied to recalibrate nominal GDP to real GDP.

Real GDP

The measure of a country's economic output adjusted for price changes (inflation or deflation), providing a more accurate reflection of an economy's size and how it’s growing over time.