Which policy measure is most likely to be effective in reducing a balance of trade deficit? Pick a,b,c, or d A. A reduction in the rate of interest B. A reduction in income tax C. Devaluation of the currency D. An increase in government spending on state benefit

Which policy measure is most likely to be effective in reducing a balance of trade deficit? Pick a,b,c, or d A. A reduction in the rate of interest B. A reduction in income tax C. Devaluation of the currency D. An increase in government spending on state benefit

Economics Today and Tomorrow, Student Edition

1st Edition

ISBN:9780078747663

Author:McGraw-Hill

Publisher:McGraw-Hill

Chapter18: Trading With Other Nations

Section: Chapter Questions

Problem 4AA

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Question

Definition Definition Difference in value of a country's net exports and net imports for goods and services in a given period. A positive balance of trade is called a surplus and coincides with more net cash inflows into a country; a negative balance of trade deficit is a deficit and results in net cash outflows. A balance of trade surplus or deficit doesn't necessarily indicate a positive or negative situation for a country.

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