The Equation NX = S + (TA - G -

Multiple Choice

The equation NX = S + (TA - G - TR) - I implies that

A) there is always a close correlation between the government budget deficit and the trade deficit
B) if national saving increases relative to domestic investment, the trade deficit will decrease
C) a reduction in the government budget deficit is likely to raise the level of saving and/or worsen the trade deficit
D) an increase in government spending will stimulate exports
E) a tax decrease can help to create a trade surplus