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Principles of Economics 2e

2nd Edition
Steven A. Greenlaw; David Shapiro
ISBN: 9781947172364

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BuyFindarrow_forward

Principles of Economics 2e

2nd Edition
Steven A. Greenlaw; David Shapiro
ISBN: 9781947172364
Textbook Problem

Some economists warn that the persistent trade deficits and a negative current account balance that the United States has run will be a problem in the long run. Do you agree or not? Explain your answer.

To determine

The explanation for the agree or disagree with the statement of some economists which gives a warning about the long run effect of trade deficit and negative current account balance on the United States.

Explanation

Nation's level of trade and balance of trade are two different things for a country's economic health. it is perfectly possible for a country to have a very high level of trade, measured by its exports and imports of goods and services of its GDP. High level of trade shows that nation exports high level of production. The United States has a low level of trade, but had enormous trade deficit for more years from the mid 1980s into the 2000s . United States only exports 13% of GDP, but it has a trade deficit of over $500 billion

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