A small Latin American country has been running a trade deficit for the past few years. A trade deficit occurs when:

Question

Quizplus · Accepted Answer

A trade deficit occurs when a government imports more than it exports.
Key Takeaway: Trade among countries often leads to greater competition, responds to differences in demands, and decreases costs. Trade deficits occur when governments import more goods (raw and manufactured) and services than they export. In the face of trade deficits, governments become indebted to foreign countries.

A Small Latin American Country Has Been Running a Trade