Which of the following is TRUE of the relationship between U.S. trade deficits and federal government budget deficits?
A. Increases in the budget deficit tend to be associated with reductions in the trade deficit.
B. Increases in the budget deficit are always associated with reductions in the trade deficit.
C. Increases in the budget deficit are always associated with increases in the trade deficit.
D. Increases in the budget deficit tend to be associated with increases in the trade deficit.
Answer: D
You might also like to view...
If the wage rate is ________ the value of marginal product, a firm can increase its profit by ________
A) greater than; selling an extra unit of output B) less than; selling one less unit of output C) less than; hiring an extra worker D) less than; hiring one less worker
Which of the following holds true, if goods sell for the same price worldwide when converted to a common currency?
a. A high rate of inflation exists. b. A fixed exchange-rate system exists. c. Purchasing power parity exists. d. The foreign exchange market is in equilibrium. e. Arbitrage opportunities exist.