A trade deficit occurs when a country imports more goods and services than it exports. Therefore, reducing a trade deficit can be achieved by increasing exports, which would result in more money coming into the country, and ideally over time, a decrease in the trade deficit.

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Trade Deficits

Question 30

Multiple Choice

Trade deficits:

A) indicate that a country, in its international activities, is producing more than it is consuming.
B) can be reduced by decreasing exports.
C) can be reduced by increasing exports.
D) can be reduced by increasing imports.

Correct Answer: