The US Is Able to Maintain a Large Trade Deficit Because

question 58

Multiple Choice

The U.S. is able to maintain a large trade deficit because:

• A) when the business cycle is in a boom, it will be a trade surplus.
• B) it is balanced by a large capital surplus.
• C) it is balanced by a large capital deficit.
• D) None of these statements is true.

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Definitions:

Identical Goods

Products that are indistinguishable from each other in the eyes of the consumer, often associated with perfect competition markets.

Profit-Maximizing Output

The level of production at which a company can achieve the highest profit, where marginal revenue equals marginal cost.

Total Revenue

The total amount of money generated by the sale of goods or services related to the company's primary operations.

Market Price

The market price at which commodities or services are currently being traded.