A trade deficit occurs when:
A)a country imposes a price floor on the good in which it has a comparative advantage.
B)a country's imports exceed its exports.
C)a country imposes a price ceiling on the good in which it has a comparative advantage.
D)a country's exports exceed its imports.
E)the domestic product market is in disequilibrium.

Question

Quizplus · Accepted Answer

A trade deficit occurs when a country's imports exceed its exports. This means that the country is buying more goods and services from other countries than it is selling to them, resulting in a negative balance of trade. This can lead to a flow of money out of the country and a decrease in the value of its currency.

A Trade Deficit Occurs When