trade deficit

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Related to Trade deficits: Trade surplus

Unfavorable Balance of Trade

The difference between the value of a country's exports and the value of its imports such that imports exceed exports. Analysts disagree on the impact, if any, of an unfavorable balance of trade on the economy. Some economists believe that an unfavorable balance of trade, especially if sustained, causes unemployment and lowers GDP growth. Others believe that the balance of trade has little impact, because the more international trade occurs, the more likely it is that foreign companies will invest in the home country, negating any negative effects. An unfavorable balance of trade is also called a trade deficit.
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trade deficit

The amount of goods and services that a country imports that is in excess of the amount of goods and services it exports. Large trade deficits may result in unemployment and a reduction in economic growth in the country with the deficit. Compare trade surplus.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
Here is a look at the trade deficit and its causes and effects:
The overall trade deficit matters, but not for what it says about trade.
Trade deficits can be a problem when those deficits are due to government borrowing in countries with weak economic and political institutions, or in smaller countries where free capital flows might be destabilizing.
continues to expand faster than most other industrialised countries, so it should not surprise anyone that the trade deficit is worsening," said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania.
trade deficit. But the fact that both the Administration and Congress continue to bank on this false hope prevents the nation from pursuing more difficult but far more reliable solutions.
The UK's trade deficit with the rest of the world widened unexpectedly to pounds 4.41 billion in November from pounds 4.25 billion the month before as exports fell faster than imports.
economy since 1973, when the era of floating exchange rates and free capital flows began, confirms that rising trade deficits generally accompany periods of rising investment and expansion.
There are certainly circumstances when budget deficits can increase trade deficits by increasing consumption of foreign goods, but there are other factors that can also increase trade deficits, including industrial backwardness, foreign trade barriers, and a short-age of expensive natural resources.
trade deficits of the 1980s were caused by greater foreign trade barriers or other unfair trade practices.
The biggest problems facing the new administration are not the budget and trade deficits. Rather, the biggest problems are all those people in Congress, in editorial offices, and even in some corporate boardrooms who want to drive those deficits down as fast as possible.
Although reaching a crescendo in 2004, heavy foreign borrowing and associated trade deficits really began in earnest in the 1980s.