When a country has a trade deficit it ?
Correct answer: B. purchases more goods from the rest of the world than it sells
- A. purchases more stocks and bonds from the rest of the world than it sells
- B. purchases more goods from the rest of the world than it sells
- C. sells more goods to the rest of the world than it purchases
- D. sells more stocks and bonds to the rest of the world than it purchases
Explanation
A trade deficit means the value of goods purchased from abroad exceeds the value of goods sold abroad. The country therefore imports more merchandise than it exports.
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The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
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