Some economists believe that the high U.S.trade deficit should not be a concern because:
A)the inflow of financial capital will finance new investment that will produce more goods in the future to reverse the deficit without serious disruptions to the economy.
B)the inflow of financial capital will finance more consumption and the trade deficit will correct itself.
C)the inflow of financial capital will finance new investment that will produce more goods in the future but the economy will face a significant economic distress.
D)the long run effects of the trade deficit are correctly anticipated and therefore we will observe no serious disruptions in the economy.

Question

Quizplus · Accepted Answer

The inflow of financial capital is expected to finance new investments, leading to increased production and potentially reversing the trade deficit without causing major economic disruptions.

Some Economists Believe That the High U