ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -When a country imports more than it exports, it has a “trade deficit.” Trade deficits can cause foreign exchange shortages. Without foreign exchange, businesses and governments can’t pay the bills they owe other countries.

Detailed explanation-2: -A country has a trade deficit when the value of its imports exceeds the value of its exports. The impacts of trade deficits are frequently over-simplified. Trade deficits can be damaging but they also bring welcome economic benefits.

Detailed explanation-3: -If a country exports a greater value than it imports, it has a trade surplus or positive trade balance, and conversely, if a country imports a greater value than it exports, it has a trade deficit or negative trade balance.

Detailed explanation-4: -If imports exceed exports, the country or area has a trade deficit and its trade balance is said to be negative.

Detailed explanation-5: -A trade deficit occurs when a nation imports more than it exports.