4. The United States has a trade deficit.

A. How is the U.S. trade deficit related to the level of spending and the level of production in the United States?

B. How is the trade deficit related to foreign investment in the U.S.?

C. If Americans were to increase their rate of savings, how would this affect the trade deficit? Justify your answer.

D. Recently the dollar has gained strength in international currency markets. Would this make it easier or harder for the U.S. to reduce its trade deficit? Justify your answer.

E. Based on historical evidence, if the U.S. economy were to go into a recession, how would that affect the levels of U.S. imports and U.S. exports. How would it affect the U.S. trade deficit? Justify your answers.