Question

If the value of goods and services bought from other countries is more than the value of goods and services sold to other countries, this is called a. a trade deficit. b. a trade surplus. c. an expansion. d. a recession. e. a business cycle.

   If the value of goods and services bought from other countries is more than the value of goods and services sold to other countries, this is called
a. a trade deficit.
b. a trade surplus.
c. an expansion.
d. a recession.
e. a business cycle.

Macroeconomics in Modules

Paul Krugman, Robin… 3rd Edition

Chapter 3, Problem 5

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The question involves the concepts of "value of goods and services bought from other countries" and "value of goods and services sold to other countries." These refer to imports and exports, respectively. Show more…

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If the value of goods and services bought from other countries is more than the value of goods and services sold to other countries, this is called a. a trade deficit. b. a trade surplus. c. an expansion. d. a recession. e. a business cycle.

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Key Concepts

Balance of Trade

The balance of trade is an economic measurement of the difference between a country’s exports and imports of goods and services. It is used to assess a country’s trade position and can indicate whether the country is gaining or losing wealth through international transactions.

Trade Deficit

A trade deficit occurs when the value of a country’s imports exceeds its exports over a specified period. This situation results in a negative balance of trade and can have various implications for the domestic economy, including impacts on currency value and overall economic health.

International Trade

International trade is the exchange of goods and services between countries. It involves exporting domestic products to foreign markets and importing foreign products into the domestic market, playing a crucial role in global economic relationships and growth.

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