What effect did the decrease in the value of the dollar have on the U.S. trade deficit in the period from 2006 to 2009?
A. It decreased the trade deficit as Americans bought more U.S. capital goods.
B. It decreased the trade deficit as foreigners were attracted to the increased value of U.S. products and Americans bought fewer imports.
C. It increased the trade deficit as U.S. investors bought more domestic financial assets.
D. It increased the trade deficit as Americans bought more imports and foreigners bought fewer U.S. products.
Answer: B
You might also like to view...
Suppose the price of capital and labor remain constant but that the average educational level of workers has increased and therefore, productivity of labor increases. This would lead a firm
A) to adopt a more capital-intensive production technology. B) to keep its output and production technology unchanged, but to use fewer units of labor. C) to adopt a more labor-intensive technology. D) to use only labor to produce the product.
A budget line represents all combinations of bundles of two goods that give a consumer equal total utility
a. True b. False Indicate whether the statement is true or false