Evaluate whether the following statements are True or False, and explain your answer:
a. A trade deficit occurs when the government spends more than it receives in tax revenue
b. An increase in interest rates in the rest of the world will lead to a stronger dollar
a. False. A trade deficit occurs when imports are higher than exports. That is, a negative balance of trade. A government budget deficit is when the government ...
This solution goes over international economic concepts including trade deficit and interest rates.