A trade deficit occurs when:
A) foreign remittances paid are less than foreign remittances received.
B) exports are less than imports.
C) exports equal imports.
D) exports are greater than imports.

Question

Quizplus · Accepted Answer

A trade deficit occurs when a country's imports exceed its exports, meaning it is buying more from foreign countries than it is selling to them. Option A (foreign remittances paid are less than foreign remittances received) refers to the balance of payments, not trade deficits. Option C (exports equal imports) refers to a balanced trade, not a trade deficit. Option D (exports are greater than imports) refers to a trade surplus, which is the opposite of a trade deficit.

A Trade Deficit Occurs When