Which of the following would do the most to reduce a trade deficit?
A)Increase domestic saving.
B)Increase political stability and respect for property rights.
C)Negotiate with other countries to get them to reduce their trade restrictions.
D)Impose higher tariffs on imported goods.

Question

Quizplus · Accepted Answer

Increasing domestic saving would lead to a decrease in domestic consumption and an increase in investment. This, in turn, would lead to a decrease in imports and an increase in exports, ultimately reducing the trade deficit.

Option B is important for attracting foreign investment, but it may not necessarily directly impact the trade deficit.

Option C may help in equalizing trade between countries, but it may not necessarily reduce the trade deficit of a particular country.

Option D may lead to retaliation from other countries, which could harm trade and ultimately lead to a more significant trade deficit.

Which of the Following Would Do the Most to Reduce