All of the following would lead to an a reduction in the country’s trade deficit except which one?


A country has a trade deficit. The demand for its imports and exports are both price elastic.

All of the following would lead to an a reduction in the country’s trade deficit except which one?
A . A fall in consumer incomes in the country.
B . An improvement in the country’s terms of trade.
C . A depreciation in the exchange rate for the country’s currency.
D . A rise in the rate of inflation in its trading partners’ economies.

Answer: B

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