Which of the following is true when a county is experiencing a trade deficit (NX

Question

Which of the following is true when a county is experiencing a trade deficit (NX < 0)?

Quizplus · Accepted Answer

When a country is experiencing a trade deficit (NX < 0), it means that the country is importing more goods and services than it is exporting. This implies that the demand for foreign goods is greater than the demand for domestic goods, which leads to a decrease in the demand for domestic goods. Therefore, option C is correct. Options A and B are incorrect as they suggest that demand for domestic goods is equal to or greater than the demand for foreign goods, which is not the case in a trade deficit situation. Option D is also incorrect as a budget deficit is unrelated to the trade deficit.

Which of the Following Is True When a County Is