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Chapter 10: Q. 24 (page 266)

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

Short Answer

Expert verified

Deficit.

Step by step solution

01

Step1. Introduction

Trade deficit is a situation when imports exceed exports.

Trade surplus is a situation when exports exceed imports.

Balanced trade is a situation when exports and imports are equal.

02

Step2. Explanation

US for past many decades has been facing trade deficit situation. It is primarily because of high imports of oil and other consumable products.

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Most popular questions from this chapter

At one point Canada’s GDP was \(1,800billion and its exports were \)542billion. What was Canada’s export ratio

at this time?

Imagine that the U.S. economy finds itself in the

following situation: a government budget deficit of \(100 billion, total domestic savings of \)1,500 billion, and total domestic physical capital investment of \(1,600 billion. According to the national saving and investment identity, what will be the current account balance? What will be the current account balance if investment rises by

\)50 billion, while the budget deficit and national savings remain the same?

If imports exceed exports, is it a trade deficit or a trade surplus? What about if exports exceed imports?

State whether each of the following events involves a financial flow to the Mexican economy or a financial flow out of the Mexican economy:

(a) Mexico imports services from Japan.

(b) Mexico exports goods to Canada.

(c) U.S. investors receive a return from past financial investments in Mexico.

Does a trade surplus help to guarantee strong economic growth?
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