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| Science Forum Index » Economy Forum » Hypothetical question on dumping goods/services |
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| Brablo |
 Posted: Mon Nov 14, 2005 1:41 pm |
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Guest
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Suppose that foreigners sold us their goods at a *loss* to us or that
they sold us their goods by dumping it here. Another words, they sold
their goods/services below cost. If this hypothetical situation
occured,
1. I realize that there would be a trade deficit still (assuming that
the USA is importing a higher dollar volume of goods than it exports).
How would this imbalance be financed? I truly don't understand how a
current balance is financed or what that means.
2. Would this hypothetical situation be good for the USA or bad? I
would think that it's GREAT for us since they are GIVING us money.
------------------------------------
Foreign investors will likely tire of bankrolling the bloated U.S.
trade deficit but the economy's flexibility should help temper any
fallout, Federal Reserve Chairman Alan Greenspan said Monday.
Greenspan's remarks delivered via video link to a conference in
Mexico referred to the broadest measure of U.S. trade called the
current account deficit, which swelled to a record $668 billion last
year. The shortfall is financed mostly by foreign investors. |
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