1) Which of the following contributed to the rising U.S. trade deficit between 1997 and 2005? Check all that apply.
a) An increase in saving by a major U.S. trading partner
b) Strong growth among U.S. trading partners combined with recession and slow growth within the United States
c) Relatively strong economic growth in the United States, which allowed Americans to import more products even as foreign purchases of American products remained stable or declined
2) Which of the following statements support the view that the trade deficit is a problem? Check all that apply.
a) Americans save too little while consuming too much.
b) The United States will need to undergo significant economic adjustments as the government begins to pay off foreign investors' claims on American assets.
c) The trade deficit will lead to lower living standards in the United States.
d) The trade deficit arises because foreigners want to invest in the United States.