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What is a foreign trade deficit or surplus? How does this affectinterest rates?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter23: The International Trade And Capital Flows

Section: Chapter Questions

Problem 31RQ: What is the difference between trade deficits and balance of trade?

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Question

What is a foreign trade deficit or surplus? How does this affect
interest rates?

Definition Definition Situation in which a country spends more on imports than it makes through exports. When a trade deficit exists, net exports will be negative. Trade Deficit = (Imports) - (Exports)

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