2006-11-01 06:33:10 · 4 answers · asked by kitsune12 1 in Social Science ➔ Economics
Trade deficit leads to either increased foreign demand for domestic assets or the devaluation of the domestic currency.
2006-11-01 09:59:51 · answer #1 · answered by NC 7 · 0⤊ 0⤋
If there is a trade deficit, then more money is leaving than entering. This means that the pound (I'm in England) will be sold demanded less and sold more. Thereby decreasing the exchange rate, which would mean that exports were cheaper and the whole thing would balance out. hmmm. . .i think that's right.
2006-11-01 16:22:06 · answer #2 · answered by Crypto 2 · 0⤊ 0⤋
A trade deficit means that, at a gross level, an economy is losing money, that the money is exiting the country for other ones through the purchase of foreign goods.
2006-11-01 16:06:54 · answer #3 · answered by The Armchair Explorer 3 · 0⤊ 0⤋
The end of the world.
2006-11-01 17:03:49 · answer #4 · answered by Lizzie03 2 · 0⤊ 0⤋