A trade deficit experienced by a country during a year generally signals the poor health of the economy.

Question

Quizplus · Accepted Answer

A trade deficit may not necessarily indicate the poor health of an economy. It could be due to various factors such as strong domestic demand for goods and services, a competitive exchange rate, or the pursuit of a deliberate growth strategy by the government. Trade deficits can also be offset by other economic indicators such as high productivity, low unemployment rates, or a thriving service sector.

A Trade Deficit Experienced by a Country During a Year