Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Decrease exports and increase imports
B
Increase exports and decrease imports
C
Maintain the same level of exports and imports
D
Only increase tariffs on imported goods
Understanding the Answer
Let's break down why this is correct
Answer
When a country has a trade deficit, it means it is importing more goods and services than it is exporting. To adjust this balance, the country can take several steps, such as increasing its exports by promoting local products in foreign markets or reducing imports by placing tariffs on foreign goods. For example, if a country starts a campaign to encourage people to buy locally made products, it may increase its exports while decreasing the demand for imported goods. Additionally, the country could work on improving its economy to make its products more competitive. By making these adjustments, the country can aim to balance its trade and improve its overall economic health.
Detailed Explanation
To fix a trade deficit, a country should sell more goods to other countries and buy fewer goods from them. Other options are incorrect because This option suggests selling less and buying more, which makes the deficit worse; Keeping exports and imports the same won't change the deficit.
Key Concepts
trade balance
adjustment mechanisms.
Topic
Balance of Payments Adjustments
Difficulty
medium level question
Cognitive Level
understand
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