Question and answer
In 1 or 2 sentences, explain if a country would rather have a trade surplus or a trade deficit.[ANSWER IN YOUR WORDS PLEASE]
Generally, it is often assumed that a trade surplus is good for a country whereas a trade deficit is bad. [ This should be better put into context and sound something like: Trade imbalances are always negative in the long run, but a trade surplus might be considered the better of two evils. Why is that so? What are trade imbalances and where do they come from? Let’s start with explaining the
whole matter in an illustrative way. Imagine there are only two countries in the world that interact and trade with eachother. Country A exports more than country B, thus has a trade surplus and country B has the opposite position, exporting less than it imports resulting in a trade deficit. However, the story does not end here, the trade balance is only part of something bigger, the balance of payments. The balance of payments has to balance at all times very much like a regular balance sheet of a corporation. As a result, country A has to buy something from country B to offset the surplus in trade. This happens most often in forms of investment, may it be in government bonds, stock, housing, etc. Simplifying things, country A gives a sort of loan to country B in exchange for country B buying the products of country A. If you feel like that is the same as if your retailer of choice allows you to buy its products on credit, you are not that far from the truth. Your retailer likes it, because he can sell his production off more quickly and you, well you are just happy to posses whatever you have purchased. But back to our trade deficits. If a country runs trade deficits for an extended period of time, it will inevitably face troubles. It becomes very dependent on foreigners’ willingness to keep buying assets. If they stop doing so, country B’s currency will drop significantly. For the country running surpluses, the risk is simply that their export market breaks away when its currency appreciates significantly making its goods more expensive abroad. In addition, a devaluation of country B’s currency, decreases the value of the investments country A has made in country B. ]
Expert answered|bettyfit83|Points 20|
Question
Asked 6/4/2013 11:41:14 AM
0 Answers/Comments
Get an answer
New answers
Rating

There are no new answers.

Comments

There are no comments.

Add an answer or comment
Log in or sign up first.
Questions asked by the same visitor
Streptococci infections are spread by_______ .
Weegy: How are group A streptococci spread? These bacteria are spread by direct contact with nose and throat discharges of an infected individual or with infected skin lesions. [ The risk of spread is greatest when an individual is ill, such as when people have strep throat or an infected wound. Individuals who carry the bacteria but have no symptoms are much less contagious. Treatment of an infected person with an appropriate antibiotic for 24 hours or longer eliminates contagiousness. However, it is important to complete the entire course of antibiotics as prescribed. Household items like plates, cups and toys do not play a major role in disease transmission. › Communicable Disease? ] (More)
Question
Expert Answered
Asked 5/28/2013 2:48:52 PM
0 Answers/Comments
The only cure for the common cold and the flu is________. A.rest B.cold medication C.antibiotics
Weegy: The only cure for the common cold and the flu is C.antibiotics. (More)
Question
Updated 94 days ago|12/26/2014 2:53:21 AM
1 Answer/Comment
The only cure for the common cold and the flu is rest.
Added 94 days ago|12/26/2014 2:53:19 AM
This answer has been confirmed as correct, not copied, and helpful.
Public health systems seek to promote the health of an entire community by controlling the spread of disease. True or False
Weegy: Public health systems seek to promote the health of an entire community by controlling the spread of disease. Is true. [ ] (More)
Question
Expert Answered
Asked 5/28/2013 3:22:46 PM
0 Answers/Comments
Hepatitis can cause severe liver damage if it is not treated properly. True or False
Weegy: True. Hepatitis can cause severe liver damage if it is not treated properly. (More)
Question
Expert Answered
Asked 5/28/2013 3:27:54 PM
0 Answers/Comments
_____drugs block the effects of certain neurotransmitters on the brain.
Question
Not Answered
Updated 149 days ago|11/1/2014 4:17:49 PM
1 Answer/Comment
Anti-psychotic drugs block the effects of certain neurotransmitters on the brain.
Added 149 days ago|11/1/2014 4:17:49 PM
This answer has been confirmed as correct, not copied, and helpful.
20,179,648 questions answered
Popular Conversations
After the Spanish-American War, the _______ reserved the right of the ...
Weegy: After the Spanish-American War, the Platt Amendment reserved the right of the United States to intervene in ...
3/29/2015 10:56:48 PM| 3 Answers
MyPlate was created to __________.
3/30/2015 1:01:53 PM| 3 Answers
Discretionary spending is spending which requires governmental ...
Weegy: Discretionary spending is spending which requires governmental approval on an annual basis. TRUE. User: ...
3/29/2015 9:27:10 AM| 2 Answers
What is the equation of the line that has a slope of –2 and a ...
Weegy: The answer is B) architecture and music. User: Some nouns that end in -um are made plural by changing the –um ...
3/29/2015 10:39:54 AM| 2 Answers
Weegy Stuff
S
L
P
L
P
P
P
Points 1270 [Total 9156]| Ratings 0| Comments 1270| Invitations 0|Offline
S
1
L
Points 622 [Total 1533]| Ratings 6| Comments 562| Invitations 0|Offline
S
P
C
L
P
L
1
P
Points 541 [Total 7848]| Ratings 8| Comments 461| Invitations 0|Offline
S
L
Points 521 [Total 1026]| Ratings 10| Comments 411| Invitations 1|Offline
S
1
L
L
Points 486 [Total 7987]| Ratings 0| Comments 486| Invitations 0|Offline
S
L
Points 382 [Total 1504]| Ratings 2| Comments 362| Invitations 0|Offline
S
Points 199 [Total 567]| Ratings 3| Comments 169| Invitations 0|Offline
S
Points 166 [Total 166]| Ratings 1| Comments 156| Invitations 0|Offline
S
Points 42 [Total 158]| Ratings 4| Comments 2| Invitations 0|Offline
S
Points 35 [Total 126]| Ratings 0| Comments 35| Invitations 0|Offline
Home | Contact | Blog | About | Terms | Privacy | Social | ©2015 Purple Inc.