Economic Research On Trade Deficit - 842 Words

Economic Research Paper on Trade Deficit A trade deficit in the U.S is a situation in which the value of U.S imports of goods and services exceeds the value of its exports and will often support a government budget deficit. The U.S trade deficits and surpluses compared with federal budget deficits and surpluses. Basically, this means that United States exported more than it imported until the mid-1970s. After that, it stared to experience large trade deficits. During the 1970s, imports of goods and services began to consistently exceed exports of those items on an annual basis in the United States. During the same time, the federal budget deficit rose dramatically. Both deficits increased once again in the early 2000s. Once the economic chaos happened in the late 2000s which includes the recession time, the budget deficit exploded while the trade deficit shrank somewhat. However, the larger trade deficits tend to support larger government budget deficits. An economic measure of a negative balance of trade in which a country ’s imports exceeds its exports is a form of trade deficit. A trade deficit represents a large amount of money of domestic currency to foreign markets. When breaking down trade deficit, the economic theory represents that a trade deficit is not necessarily a bad situation because it can often be corrected over time. However, some economists are worried that trade deficit has been reported and growing in the U.S for the past few decades. This means thatShow MoreRelatedEssay on The J-Curve Phenomenon in Jamaica: Fact or Fiction?950 Words   |  4 Pagesinfluence that the increasing exchange rate has on the trade balance deficit in developing countries. This paper contributes to the literature by investigating and testing whether the J-curve phenomenon exists in Jamaica. 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