A country purchases $110 billion of foreign-produced goods and services and sells $120 billion of domestically produced goods and services to foreign countries. It has imports of
A)$120 billion and a trade deficit of $10 billion.
B)$120 billion and a trade surplus of $10 billion.
C)$110 billion and a trade deficit of $10 billion.
D)$110 billion and a trade surplus of $10 billion.

Question

Quizplus · Accepted Answer

The country has imports of $110 billion (the value of foreign-produced goods and services it purchases) and a trade surplus (exports exceed imports) of $10 billion ($120 billion in sales of domestically produced goods and services to foreign countries minus $110 billion in purchases of foreign-produced goods and services).

A Country Purchases $110 Billion of Foreign-Produced Goods and Services