If foreigners become unwilling to hold U.S. assets, the U.S. trade balance will:
A)go further into deficit.
B)go further into surplus.
C)experience smaller deficits.
D)experience smaller surpluses.

Question

Quizplus · Accepted Answer

If foreigners are unwilling to hold U.S. assets, the demand for the U.S. dollar decreases, leading to a depreciation of the dollar. This makes U.S. exports cheaper and imports more expensive, potentially reducing the trade deficit.

If Foreigners Become Unwilling to Hold U