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A trade deficit occurs when ______________________ Net capital inflows are negat

ID: 1210919 • Letter: A

Question

A trade deficit occurs when ______________________

Net capital inflows are negatiive when____________________________

imports are greater than exports; capital inflows are geater than capital outflows

imports are greater than exports; capital inflows are less than capital outflows

imports are less than exports; capital inflows are geater than capital outflows

imports are less than exports; capital inflows are less than capital outflows

A.

imports are greater than exports; capital inflows are geater than capital outflows

B.

imports are greater than exports; capital inflows are less than capital outflows

C.

imports are less than exports; capital inflows are geater than capital outflows

D.

imports are less than exports; capital inflows are less than capital outflows

Explanation / Answer

Option (B).

Trade deficit = Imports - Exports

Net capital inflow = Capital inflow - Capital outflow

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