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Chapter 32: Problem 1

We became a debtor nation in (LO4) a) 1975 c) 1985 b) 1980 d) 1990

Short Answer

Expert verified
The correct answer for the year the country became a debtor nation is 1985 (option c). A debtor nation is a country that has a negative balance of payments, meaning it owes more than it is owed in terms of international trade. This can indicate economic activity and investment in future growth, but consistently high debt levels can lead to instability and pressure on a nation's currency.

Step by step solution

01

Correct Answer

The correct answer for the year the country became a debtor nation is 1985 (option c).
02

Understanding Debtor Nation

A debtor nation is a country that has a negative balance of payments, or simply, it owes more than it is owed in terms of international trade. Being a debtor nation is not necessarily a bad thing as it often indicates that a country is economically active and investing in future growth. However, a consistently high debt level can lead to economic instability and put pressure on a nation's currency. By understanding the concept of a debtor nation and knowing the correct answer in the given context, you can now analyze similar historical facts and have a better understanding of a country's economic situation during a particular time period.

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Most popular questions from this chapter

The international gold standard worked well until (LO3) a) World War I c) 1968 b) 1940 d) 1975

Running mounting current account deficits is analogous to (LO4) a) running up debt on a credit card b) taking money out of one pocket and putting it in another c) owing money to ourselves d) borrowing money that never has to be repaid

The world's leading debtor nation is \- (LO4) a) Argentina c) Mexico b) Brazil d) the United States

If a Japanese DVD player priced at 12,000 yen can be purchased for \(\$ 60\), the exchange rate is (LO3) a) 200 yen per dollar. d) 200 dollars per yen. b) 20 yen per dollar. e) none of the above. c) 20 dollars per yen.

The United States began to consistently run current account deficits since \((\mathrm{LOl}, 4)\) a) 1961 d) 1991 b) 1971 e) 2001 c) 1981
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