When there is a trade deficit, as a share of GDP, the sum of consumption, investment, and government purchases will be greater than 100 percent.

Question

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A trade deficit means that a country is importing more than it is exporting, which means that the total spending on consumption, investment, and government purchases is greater than the total income earned from exports. This results in a higher sum of these expenditures as a share of the country's GDP, potentially exceeding 100 percent.

When There Is a Trade Deficit, as a Share of GDP