Question

Some economists argue that a trade deficit...

A. is a drain on the national GNP.
B. increases GDP.
C. Benefits the household who are purchasing the imports
D. causes an inflationary gap.
E. does not change the economy significantly because the multiplier does not apply

Answer 1

C. Benefits the household who are purchasing the imports

Step-by-step explanation:

When trade deficit occurs, there will be more imported products that come into our country compared to the exported products that we sell outside.

When this happen, the price of the imported product will tend to be cheaper since it become more abundant in the market. This mean that trade deficit technically Benefits the household who are purchasing the imports