Statement I: Foreigners have been recycling the dollars they have obtained from our trade deficit by investing them in the United States.
Statement II: On an international basis,we have been consuming more than we have been producing.

Question

Quizplus · Accepted Answer

Statement I is true as foreign investors have been using their dollars obtained from the US trade deficit to invest in the US economy. Statement II is also true as the US has been consuming more goods and services from other countries than it has been producing domestically, leading to a trade deficit. Therefore, both statements are true.

Statement I: Foreigners Have Been Recycling the Dollars They Have