Suppose the United States spends more on foreign goods and services than foreigners spend on our goods and services and the United States sells no foreign assets. Then the

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Quizplus · Accepted Answer

The correct answer is B because when the United States spends more on foreign goods and services than foreigners spend on U.S. goods and services, it runs a trade deficit. This deficit is exactly the amount by which imports exceed exports. To finance this deficit without selling foreign assets, the United States must borrow the difference, which is the amount by which imports exceed exports.

Suppose the United States Spends More on Foreign Goods and Services