An economy with a trade deficit must also have:
A)a trade deficit.
B)a budget surplus.
C)positive net capital outflows.
D)positive net capital inflows.

Question

Quizplus · Accepted Answer

This follows from the accounting identity NX + KI = 0, where NX is net exports and KI is net capital inflows. A trade deficit implies a negative NX, so KI must be positive, meaning there is capital inflow.

An Economy with a Trade Deficit Must Also Have