When Serena from the United States flies to Scotland on a Canadian airline, stays in an Edinburgh hotel, and buys many wool sweaters from Scotland to bring home, she is
A)decreasing the trade deficit.
B)being disloyal and unpatriotic.
C)contributing to the negative balance of payments.
D)buying American-made goods.
E)buying American-produced services.

Question

Quizplus · Accepted Answer

Serena's actions contribute to the negative balance of payments because she is buying goods from Scotland, which increases imports and therefore the trade deficit. As a result, money is flowing out of the United States and not coming back in, contributing to the negative balance of payments.

When Serena from the United States Flies to Scotland on a Canadian