In 2006 the U.S. had a large trade
A)surplus and a large net capital inflow.
B)surplus and a large net capital outflow.
C)deficit and a large net capital inflow.
D)deficit and a large net capital outflow.

Question

Quizplus · Accepted Answer

A trade deficit means that the U.S. is importing more goods and services than it is exporting, which results in a net outflow of capital as the U.S. pays for these imports. However, there can still be a large net capital inflow if foreign investors are investing more money in the U.S. than U.S. investors are investing in foreign countries. This was the case in 2006, as foreign investors were attracted to the U.S. financial markets and real estate market.

In 2006 the U.S. Had a Large Trade