Asked by Svetlana Brenner on Jul 13, 2024
Verified
Which one of the following is not a major factor that contributed to large trade deficits in the United States in the period 2002-2007?
A) a declining saving rate coupled with a rising investment rate in the U.S.
B) a U.S. economy growing faster than its trading partners
C) large trade deficits with OPEC economies
D) flexible exchange rate between the U.S. dollar and the Chinese yuan
Trade Deficits
A situation in which a country's imports exceed its exports during a given time period.
Saving Rate
The proportion of disposable income that individuals or households save rather than spend on consumption.
U.S. Economy
The economic system of the United States, characterized by a mixed economy that includes private enterprise alongside limited government involvement.
- Evaluate the factors contributing to and the implications of large trade deficits in the United States.
Verified Answer
NT
Nguyen Tuan Dung (K13_HN)Jul 18, 2024
Final Answer :
D
Explanation :
The exchange rate between the U.S. dollar and the Chinese yuan was not flexible during the period 2002-2007; it was largely fixed or pegged by China to maintain its export competitiveness, which does not align with the concept of a flexible exchange rate contributing to the U.S. trade deficits.
Learning Objectives
- Evaluate the factors contributing to and the implications of large trade deficits in the United States.