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Chapter 10: Problem 24

In recent decades, has the U.S. trade balance usually been in deficit, surplus, or balanced?

Short Answer

Expert verified
In recent decades, the U.S. trade balance has usually been in deficit, meaning the value of imports has been higher than the value of exports.

Step by step solution

01

Understand Trade Balance

Trade balance is the difference between the value of a country's exports and the value of its imports. A trade surplus occurs when the value of a country's exports is greater than that of its imports, while a trade deficit occurs when the value of imports is greater than that of exports.
02

Research U.S. Trade Balance Trends

To determine the status of the U.S. trade balance in recent decades, we can refer to historical data and trends from reliable sources such as the U.S. Bureau of Economic Analysis or World Bank.
03

Analyze the Data

After reviewing the historical data, we can see that the U.S. trade balance has mostly been in deficit in recent decades, with a few exceptions in the early 90s. This indicates that the U.S. has been importing more goods and services than it has been exporting.
04

Conclusion

In recent decades, the U.S. trade balance has usually been in deficit, which means the value of imports has been higher than the value of exports.

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Most popular questions from this chapter

If foreign investors buy more U.S. stocks and bonds, how would that show up in the current account balance?

State whether each of the following events involves a financial flow to the U.S. economy or away from the U.S. economy: a. Export sales to Germany b. Returns paid on past U.S. financial investments in Brazil c. Foreign aid from the U.S. government to Egypt d. Imported oil from the Russian Federation e. Japanese investors buying U.S. real estate

Occasionally, a government official will argue that a country should strive for both a trade surplus and a healthy inflow of capital from abroad. Is this possible?

Using the national savings and investment identity, explain how each of the following changes (ceteris paribus) will increase or decrease the trade balance: a. A lower domestic savings rate b. The government changes from running a budget surplus to running a budget deficit c. The rate of domestic investment surges

Explain the relationship between a current account deficit or surplus and the flow of funds.
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