Suppose the United States spends more on foreign goods and services than foreigners spend on our goods and services and the United States sells no foreign assets. Then the

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Quizplus · Accepted Answer

If the United States spends more on foreign goods and services than foreigners spend on our goods and services and we do not sell any foreign assets, then the difference between imports and exports must be financed by borrowing from abroad. Therefore, the United States must borrow an amount equal to imports minus exports to finance its trade deficit.

Suppose the United States Spends More on Foreign Goods and Services