If the value of a nation's merchandise imports exceeds merchandise exports, the nation is running a

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A merchandise trade deficit occurs when a country's imports of physical goods exceed its exports of physical goods. This is different from a balance of payments deficit, which includes both goods and services as well as various investment flows. A balance of payments surplus would mean that a country is earning more foreign exchange than it is spending, while a merchandise trade surplus would mean that a country is exporting more physical goods than it is importing.

If the Value of a Nation's Merchandise Imports Exceeds Merchandise