To reduce the outflow of dollars from the United States,we need to

Question

Quizplus · Accepted Answer

Lowering the budget deficit would reduce government spending, which would in turn reduce the trade deficit as there would be less demand for imports. This would reduce the outflow of dollars from the United States as fewer dollars would be spent on imports. Therefore, option A is the best choice. Option B, raising both the budget deficit and the trade deficit, would actually increase the outflow of dollars. Option C, raising the budget deficit and lowering the trade deficit, is only partially correct as it would increase government expenditure and reduce imports, but it does not necessarily lower the trade deficit overall. Option D, lowering the budget deficit and raising the trade deficit, is inconsistent as these two variables tend to move in opposite directions.

To Reduce the Outflow of Dollars from the United States,we