ECONOMICS
TRADE EXCHANGE AND INTERDEPENDENCE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Bad because it means jobs are shipped out of the country
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Good because people are buying everything they want at the cheapest price possible
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It depends on the size of the deficit
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It is not clear, a deficit can be good if it represents buying techonology for new industries and cheaper food for the population or it can be bad if its mostly buying luxury superflouos items
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Detailed explanation-1: -Is trade deficit bad for a country’s economy? If trade deficit increases, a country’s GDP decreases. A higher trade deficit can decrease the local currency’s value. More imports than exports, according to economists, impact the jobs market and lead to an increase in unemployment.
Detailed explanation-2: -The most obvious benefit of a trade deficit is that it allows a country to consume more than it produces. In the short run, trade deficits can help nations to avoid shortages of goods and other economic problems. In some countries, trade deficits correct themselves over time.
Detailed explanation-3: -A higher trade deficit leads to jobs being outsourced to foreign countries as more imports lead to fewer job opportunities. Demand for imported goods leads to a decline in demand for locally made goods, which leads to the closing of factories and the associated job losses.
Detailed explanation-4: -: a situation in which a country buys more from other countries than it sells to other countries : the amount of money by which a country’s imports are greater than its exports. We have an annual trade deficit of $6.2 billion.