The gap between a country's potential output and its consumption is most directly related to its:
A)budget deficit.
B)trade deficit.
C)exchange rate.
D)comparative advantage.

Question

Quizplus · Accepted Answer

The gap between a country's potential output and its consumption is most directly related to its trade deficit. A trade deficit occurs when a country imports more goods and services than it exports, indicating that it consumes more than it produces.

The Gap Between a Country's Potential Output and Its Consumption