If the U.S. continually runs a bilateral trade deficit with Japan, then

Question

Quizplus · Accepted Answer

A trade deficit occurs when a country imports more goods and services than it exports. This is not necessarily a negative thing, as it allows the importing country to access goods at a lower cost and take advantage of its comparative advantage in other areas. Japan may be the low-cost supplier of goods that the US imports intensively, which could explain the bilateral trade deficit. Therefore, options A and B are not necessarily true.

If the US Continually Runs a Bilateral Trade Deficit with Japan, Then