Ideally, all nations should have a favorable balance of trade each year.

Question

Quizplus · Accepted Answer

It is not necessary for all nations to have a favorable balance of trade each year. Some nations may have a trade deficit (importing more than they export) but still have a strong economy and be able to finance this deficit through other means such as foreign investment or borrowing. Additionally, a focus on achieving a favorable balance of trade can sometimes harm a country's economy by limiting imports of necessary goods or leading to protectionist trade policies that hinder international trade.

Ideally, All Nations Should Have a Favorable Balance of Trade