Why would a government MOST likely be concerned about its country carrying a trade deficit?
A) A trade deficit means that the country's productivity is low.
B) A trade deficit means local companies do not have enough competition.
C) A trade deficit ties up money that could be used for economic growth.
D) A trade deficit decreases demand for goods overall.
E) A trade deficit means that consumers do not have enough purchasing power.

Question

Quizplus · Accepted Answer

A trade deficit means that the country is importing more goods than it's exporting, which results in more money leaving the country. This ties up money that could otherwise be used for investment and economic growth within the country. Governments would therefore be concerned about this and may take actions like implementing trade restrictions or devaluing their currency to improve their trade balance.

Why Would a Government MOST Likely Be Concerned About Its