If U.S. exports are $2.2 billion and our imports are $2.7 billion
A) the United States is lending to the rest of the world.
B) U.S. national saving is too high.
C) the United States is borrowing from the rest of the world.
D) U.S. investment must decrease.

Question

Quizplus · Accepted Answer

When a country imports more than it exports, as in this case ($2.7 billion in imports vs. $2.2 billion in exports), it means the country is consuming more foreign goods than it is selling abroad. This trade deficit typically requires the country to borrow from the rest of the world to finance the excess imports, hence the United States is borrowing from the rest of the world.

If US Exports Are $2