The United States has been experiencing trade deficits on the order of $600 billion to $800 billion during the past several years. Which of the following is an implication of these trade deficits?

Question

Quizplus · Accepted Answer

A trade deficit means that the value of imports exceeds the value of exports, resulting in a larger Gross National Expenditure (GNE) than Gross Domestic Product (GDP). Therefore, option B is the correct answer. Option A and D are incorrect because a trade deficit indicates that U.S. imports are greater than U.S. exports. Option C is incorrect because a trade deficit represents a reduction in U.S. net external wealth, not an increase.

The United States Has Been Experiencing Trade Deficits on the Order