GMAT Critical Reasoning
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Source: OG
Level: 3
Large national budget deficits do not cause large trade deficits.If they did, countries with the largest budget deficits would also have the largest trade deficits.In fact, when deficit figures are adjusted so that different countries are reliably comparable to each other, there is no such correlation.
If the statements above are all true, which of the following can properly be inferred on the basis of them?
- A Countries with large national budget deficits tend to restrict foreign trade.
- B Reliable comparisons of the deficit figures of one country with those of another are impossible.
- C Reducing a country's national budget deficit will not necessarily result in a lowering of any trade deficit that country may have.
- D When countries are ordered from largest to smallest in terms of population, the smallest countries generally have the smallest budget and trade deficits.
- E Countries with the largest trade deficits never have similarly large national budget deficits.