Which of the following factors had helped maintain the large U.S. trade deficits over the years?

Question

Quizplus · Accepted Answer

Capital and financial account surpluses refer to foreign investors investing in the US, which helps finance the trade deficit. As long as foreign investors are willing to keep investing in the US, the trade deficit can be sustained.

Answer: D 
 An increase in US net exports means that the US exports more goods and services than it imports, which would help decrease the trade deficit. However, this has not been a significant factor in maintaining the trade deficit.

A and C are incorrect because a decline in investment and a decrease in economic growth would likely lead to a decrease in the trade deficit, rather than maintaining it.

Which of the Following Factors Had Helped Maintain the Large