Multiple Choice
Why do companies decide to enter a foreign market?
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9. International Trade
Exporting and Importing
Multiple Choice
Which of the following is true about the trade imbalance in the United States?
A
The United States has eliminated its trade imbalance in recent years.
B
The United States consistently has a trade surplus, exporting more than it imports.
C
The United States typically runs a trade deficit, importing more goods and services than it exports.
D
The United States only trades with countries in North America.
Verified step by step guidance1
Step 1: Understand the concept of trade imbalance. A trade imbalance occurs when a country’s imports and exports are not equal. If a country imports more than it exports, it has a trade deficit; if it exports more than it imports, it has a trade surplus.
Step 2: Recall the typical trade pattern of the United States. Historically, the U.S. has imported more goods and services than it exports, leading to a trade deficit rather than a surplus or balanced trade.
Step 3: Evaluate each statement in the problem: The U.S. has not eliminated its trade imbalance recently, so the first statement is false. The U.S. does not consistently have a trade surplus, so the second statement is false. The U.S. trades globally, not only with North American countries, so the last statement is false.
Step 4: Identify the true statement: The U.S. typically runs a trade deficit, importing more goods and services than it exports. This aligns with historical data and economic reports.
Step 5: Conclude that the correct understanding of the U.S. trade imbalance is that it usually experiences a trade deficit, which means it imports more than it exports.
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