A country's imports are $490 billion and its exports are $529 billion.Choose the correct statement.
I.The country is a net foreign borrower.
II.The Ricardo-Barro effect holds in this country.
III.This country does not have an equilibrium in its loanable funds market.

Question

Quizplus · Accepted Answer

The country has a trade surplus because its exports exceed its imports, indicating it is a net lender, not a borrower. The Ricardo-Barro effect and equilibrium in the loanable funds market are not directly determined by the trade balance information provided.

A Country's Imports Are $490 Billion and Its Exports Are