Suppose the country of Deficitland is experiencing trade deficits.Which of the following imports is Deficitland more likely to cut?

Question

Quizplus · Accepted Answer

Deficitland is more likely to cut imports of capital goods as they are non-consumable goods used for production purposes. By cutting down on capital goods imports, Deficitland can reduce its investment expenditure and minimize its trade deficit. On the other hand, beef, cocoa, and coffee are consumable goods and their demand is likely to remain constant or fluctuate based on other factors such as preferences, availability, and prices.

Suppose the Country of Deficitland Is Experiencing Trade Deficits