Economics

ketanwalia27
Posts: 3
Joined: Sun Jun 08, 2014 4:04 pm

Economics

Postby ketanwalia27 » Sat Mar 21, 2015 8:11 am

others things equal , which of the following is most likely to decrease a country 's Trade deficit ?

A Increase its Capital account Surplus
B Decrease expenditure relative to income
C Decrease domestic savings relative to domestic investment

Can Anyone explain the solution to this above mentioned Question ?

edupristine
Finance Junkie
Posts: 722
Joined: Wed Apr 09, 2014 6:28 am

Economics

Postby edupristine » Sun Mar 22, 2015 2:54 pm

Hi, A decrease in expenditure compared to income will decrease a country's trade deficit. This is because trade deficit is when imports which is expenditure to a country is higher than exports which is income. Hence when expenditure is lower as compared to income it will decrease a country's trade deficit.

ketanwalia27
Posts: 3
Joined: Sun Jun 08, 2014 4:04 pm

Postby ketanwalia27 » Wed Mar 25, 2015 1:01 pm

OK Thanks :)


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