WORLD HISTORY

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).

Detailed explanation-2: -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-3: -On the other hand, an unfavorable balance of trade, also known as a trade deficit, occurs when a country imports more goods than it exports. This means that the country is spending more on imports than it is earning from exports, and it can be a cause for concern if it persists over a long period of time.

Detailed explanation-4: -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-5: -Reasons behind unfavorable balance of trade There is lack of resources which can be utilized in the country to form products to be exported to other countries. There is lack of skilled and good labor in the country which hinders the ability of the country to manufacture its own products efficiently.