Asked by Taylor Eakin on May 03, 2024
Verified
What are two major outcomes from the large U.S. trade deficits?
A) an increase in domestic consumption and U.S. indebtedness
B) a decrease in domestic consumption and U.S. indebtedness
C) an increase in domestic consumption and a decrease in U.S. indebtedness
D) a decrease in domestic consumption and an increase in U.S. indebtedness
U.S. Trade Deficits
The situation where the United States imports more goods and services than it exports, resulting in a negative trade balance.
Domestic Consumption
The total amount of goods and services consumed within a country.
Indebtedness
The condition of owing money or being under financial obligation.
- Explore the consequences of trade imbalances and the methods through which they are funded.
- Assess the elements that lead to, and the consequences of, substantial trade deficits in the United States.
Verified Answer
ZK
Zybrea KnightMay 07, 2024
Final Answer :
A
Explanation :
Large U.S. trade deficits typically result in an increase in domestic consumption because the country imports more goods and services than it exports, making a wider range of products available to consumers. Additionally, these deficits contribute to U.S. indebtedness as the country borrows more from foreign creditors to finance the trade deficit.
Learning Objectives
- Explore the consequences of trade imbalances and the methods through which they are funded.
- Assess the elements that lead to, and the consequences of, substantial trade deficits in the United States.