ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A trade deficit occurs when a country’s imports exceed its exports during a given time period. It is also referred to as a negative balance of trade (BOT). The balance can be calculated on different categories of transactions: goods (a.k.a., “merchandise”), services, goods and services.

Detailed explanation-2: -Effect on Gross Domestic Product When exports are less than imports, the net exports figure is negative. This indicates that the nation has a trade deficit. A trade surplus contributes to economic growth in a country.

Detailed explanation-3: -If the value of exports exceeds the value of imports, it is said that there is a trade surplus; if imports are greater than exports, the country has a trade deficit.

Detailed explanation-4: -If exports exceed imports then the country has a trade surplus and the trade balance is said to be positive. 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. For instance, in 2018 the United States exported $2.500 trillion in goods and services while it imported $3.121 trillion, leaving a trade deficit of $621 billion.