In the Short Run, a Trade Deficit Allows More Consumption

Multiple Choice

In the short run, a trade deficit allows more consumption, but in the long run, a trade deficit is a problem because the:

A) country eventually will consume more and produce less.
B) country eventually will sell all its financial assets to foreigners.
C) domestic currency will appreciate.
D) country eventually has to produce more than it consumes in order to pay foreigners their profits.