How Might a Budget Deficit Affect the Balance of Trade

question 151

Multiple Choice

How might a budget deficit affect the balance of trade?

• A)A budget deficit raises interest rates,which raises exchange rates and increases the balance of trade.
• B)A budget deficit raises interest rates,which raises exchange rates and reduces the balance of trade.
• C)A budget deficit reduces interest rates,which raises exchange rates and reduces the balance of trade.
• D)A budget deficit reduces interest rates,which reduces exchange rates and reduces the balance of trade.

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Definitions:

Congress Adjourns

The formal conclusion or suspension of a legislative session, after which members of Congress leave to return at a later date or for the end of the session.

Veto Message

A statement issued by the president of the United States when vetoing a piece of legislation, outlining his reasons for doing so.

Electoral College

A body of electors established by the United States Constitution, which formally selects the President and Vice President based on the popular vote in each state.

Constitutional Amendment

A change or addition to the US Constitution, requiring approval by a significant majority in Congress and ratification by a set number of states.