A government official announces a new policy. Thecountry wishes to eliminate its trade deficit, but willstrongly encourage financial investment from foreignfirms. Explain why such a statement is contradictory.

A government official announces a new policy. Thecountry wishes to eliminate its trade deficit, but willstrongly encourage financial investment from foreignfirms. Explain why such a statement is contradictory.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter23: The International Trade And Capital Flows

Section: Chapter Questions

Problem 3SCQ: State whether each of the following events Involves a financial flow to the Mexican economy or a...

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A government official announces a new policy. The
country wishes to eliminate its trade deficit, but will
strongly encourage financial investment from foreign
firms. Explain why such a statement is contradictory.

Definition Definition Situation in which a country spends more on imports than it makes through exports. When a trade deficit exists, net exports will be negative. Trade Deficit = (Imports) - (Exports)

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