Question 1 Your response A large trade deficit makes a small country vulnerable

Question

Question 1 Your response A large trade deficit makes a small country vulnerable to: Sharp drops in private domestic saving e Rapid decreases in consumer spending Losing foreign aid Sudden outflows of toreign capital Feedback That's incorrect. Large trade deficits mean substándal foreign investment in a country's economy Question 2 A country with a GDP of $1.5 bilin and exports of $600 millión definbely has A substantdial trade deficit A substantial government buidget surplius * A relatively high level of trade o A relatively low domestic saving rate Feedback You are correct: A country's level of trade can be measured as its exports as a percentage of GDP. For the country in question, it is $600/$1,500 0,4 or 40%. which is rather high relative to most world countries Question 3 Your response Which factor is most likely to impact a nation's level of trade? Whether the country has a trade deficit or trade surplus The amount of government spending increasing income inequality Rapid economic growth That's incorrect. Three factors infiluence a nation's level of erade: the size of ts

Explanation / Answer

1) A large trade deficit results in fall in private domestic savings. The first option is correct.

2) A country' s GDP=$1 billion=$1000 million, and export=$600 million. So it indicates high value of export. The third option is correct.

3) Rapid economic growth can influence nation's level of trade. Economic growth increases the export and after growth country become important to other nations. The fourth option is correct.

4) Current account balance increases when foreign aid is received. And decreases when foreign aid is given. The third option is correct.

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