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Fundamentals of Financial Manageme...

9th Edition
Eugene F. Brigham + 1 other
ISBN: 9781305635937

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BuyFindarrow_forward

Fundamentals of Financial Manageme...

9th Edition
Eugene F. Brigham + 1 other
ISBN: 9781305635937
Textbook Problem
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What does it mean when it is said that the United States is running a trade deficit? What impact will a trade deficit have on interest rates?

Summary Introduction

To explain: The trade deficit and its effect on interest rate.

Introduction:

Interest Rate: A rate at which a borrower is ready to pay and depositor is ready to receive the money is known as interest rate.

Trade Deficit:

Trade deficit refers to the amount of negative difference between the import and export of goods and services of any country.

Explanation
  • When a country reports to more import than the export of goods and services it shows the trade deficit of the country.
  • If a country has the trade deficit it needs to borrow the money ...

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