A U.S. trade deficit will cause all of the following phenomena except:
A)U.S. assets will have to be sold to foreigners.
B)future interest and profits from assets sold to foreigners must be paid to them.
C)future consumption must decrease to pay for the current excess of imports over exports.
D)production must eventually increase.

Question

Quizplus · Accepted Answer

A trade deficit does not necessarily require an increase in production; it involves more imports than exports, which can be financed by selling assets or borrowing.

A US Trade Deficit Will Cause All of the Following Phenomena