In 2007,France's exports totaled $490 billion and its imports totaled $529 billion.As a result,the I. rest of the world supplies funds to France.
II) quantity of loanable funds in France is less than the supply.
III) Ricardo-Barro effect occurs in France.

Question

Quizplus · Accepted Answer

Based on the given information, France has a trade deficit (imports exceed exports) of $39 billion, meaning it is borrowing funds from the rest of the world to finance its imports. However, there is no information provided to support the claim that the quantity of loanable funds in France is less than the supply or that the Ricardo-Barro effect (the idea that government deficits lead to higher interest rates and reduced private investment) is occurring in France. Therefore, only statement I is true.

In 2007,France's Exports Totaled $490 Billion and Its Imports Totaled