A trade deficit can be financed in all of the following methods except by:
A)borrowing from foreigners.
B)selling domestic assets to foreigners.
C)selling foreign assets owned by domestic residents to foreigners.
D)borrowing from domestic lenders.

Question

Quizplus · Accepted Answer

A trade deficit can be financed through borrowing from foreigners, selling domestic assets to foreigners, and selling foreign assets owned by domestic residents to foreigners. However, it cannot be financed by borrowing from domestic lenders as this would just shift the deficit from the foreign sector to the domestic sector.

A Trade Deficit Can Be Financed in All of the Following