Trade Deficits

Question 1

globalization

Answer 1

increased interdependence on other nations

Question 2

changes since WWII as trade has increased

Answer 2

• life expectancy x2
• democracy in 63% of nations
• literacy from 52% to 81%
• more availability of g/s like clean water

Question 3

balance of payments

Answer 3

record of all exchanged of g/s & assets btwn one country’s individuals, businesses, & gov’t and another’s in a given time period

Question 4

current account

Answer 4

records all exports & imports of g/s in the balance of payments

Question 5

financial capital

Answer 5

capital & assets bought/sold

Question 6

balance of trade

Answer 6

difference between total g/s exported & total products imported (aka “net imports”) –> $552 billion deficit in 2017

Question 7

flow of investments

Answer 7

more foreign investment dollars come into US than out of it

Question 8

productivity

Answer 8

amount of output per units of input

Question 9

reasons to close trade deficits

Answer 9

• foreign policies affect us
• buying imports means losing $
• protect US jobs & better pay
• if US subsidizes exports, our companies sell more
• forces US to borrow from other nations
• trade can build wealth for potential enemies

Question 10

reasons for free trade

Answer 10

• globalization = more cooperation & less war
• leads to more growth, less poverty
• more choices, more quality, lower prices
• US gets more foreign investment

Question 11

trade deficit

Answer 11

more is imported than exported

Question 12

trade suplus

Answer 12

more is exported than imported

Question 13

2 sides to every transaction

Answer 13

something paid, something gained