Trade Deficit

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Description

Trade Deficit

Trade Deficit

ANSWER


Trade balance refers to an ideal situation where a country’s imports and export are equal. In real life situations, it is difficult to attain this balance, resulting into either a deficit or a surplus.  In cases where a country’s imports are higher than its exports, a situation of trade deficit or trade gap occurs. It has been observed that, the U S economy is in a crisis of financial equities resulting into a situation of trade deficit. Certainly, the US economy requires the employment of “forward momentum” like tax cuts among others. By so doing, it is anticipated that, in the next two years, the US economy would improve resulting into a corrected balance of trade. More so, this process of recovery from recession is expected to take longer, as the economic trends are observed to reinstate slowly due to the acuity of the recession in the year 2008 (Amadeo, 2010).