Expenditure-reducing policies designed to improve a current account deficit
A) turn domestic spending towards domestic goods.
B) reduce the overall level of demand in the economy.
C) turn domestic spending towards foreign goods.
D) increase the overall level of demand in the economy.
Question 2
What is the Heckscher-Ohlin theorem? Using the case studies in the chapter on U.S. trade with China describe the theory and the resulting trade patterns that would support it.
What will be an ideal response?