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Fundamentals of Financial Manageme...
What does it mean when it is said that the United States is running a trade deficit? What impact will a trade deficit have on interest rates?
To explain: The trade deficit and its effect on interest rate.
Introduction:
Interest Rate: A rate at which a borrower is ready to pay and depositor is ready to receive the money is known as interest rate.
Trade Deficit:
Trade deficit refers to the amount of negative difference between the import and export of goods and services of any country.
- When a country reports to more import than the export of goods and services it shows the trade deficit of the country.
- If a country has the trade deficit it needs to borrow the money ...
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