A country with a trade surplus could eliminate this surplus by increasing taxes or increasing investment spending.

Question

Quizplus · Accepted Answer

A trade surplus occurs when a country exports more than it imports. Increasing taxes could reduce consumer and business spending, potentially reducing imports, but it doesn't directly increase exports or necessarily eliminate a trade surplus. Increasing investment spending could lead to more imports if the investments are in foreign goods, potentially reducing the surplus, but it could also boost domestic production and exports, depending on the nature of the investments, making the direct elimination of a trade surplus through these means uncertain.

A Country with a Trade Surplus Could Eliminate This Surplus