A trade deficit occurs when a country imports more goods and services than it exports.
Imagine you're trading baseball cards with your friends. If you give away more cards than you get back, you have a 'trade deficit'.
Balance of Trade: The difference between the value of a country's imports and its exports.
Trade Surplus: This is the opposite of a trade deficit - it happens when a country exports more than it imports.
Current Account Balance: This includes not only the balance of trade but also net income from abroad and net current transfers.
Study guides for the entire semester
200k practice questions
Glossary of 50k key terms - memorize important vocab
© 2024 Fiveable Inc. All rights reserved.
AP® and SAT® are trademarks registered by the College Board, which is not affiliated with, and does not endorse this website.