When Canada imports more than it exports, it must also buy domestic assets from foreigners.

Question

Quizplus · Accepted Answer

When Canada imports more than it exports, it runs a trade deficit, which means it is buying more goods and services from other countries than it sells to them. This situation does not necessarily require Canada to buy domestic assets from foreigners. Instead, it might finance the trade deficit through borrowing or by selling domestic assets to foreigners, not necessarily buying domestic assets from them.

When Canada Imports More Than It Exports, It Must Also