Running a trade deficit allows a country to consume more

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Why might a U.S. trade deficit be preferable to a U.S. trade surplus?

I. Running a trade deficit allows a country to consume more than it produces.

II. Americans acquire more foreign assets under a trade deficit than they do under a trade surplus.

III. Under a trade deficit, the inflow of financial capital may finance new investment that leads to stronger long-run economic growth in the United States.

A. I, II, III only

B. I and III only

C. II and III only

D. I and II only

Reference no: EM13774044

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