Question

A __________________ often results in an outflow of financial capital leaving the domestic economy and being invested in the global economy?.

Answer 1

A trade deficit often results in an outflow of financial capital leaving the domestic economy and being invested in the global economy

What is trade deficit?

• A country has a trade surplus or positive trade balance if it exports more than it imports; on the other hand, a country has a trade deficit or negative trade balance if it imports more than it exports. About 60 of the 200 countries as of 2016 had a trade surplus.
• The majority of trade specialists and economists dispute the idea that bilateral trade imbalances are undesirable in and of themselves.
• The difference between the monetary value of a country's exports and imports over a specific time period is known as the balance of trade, commercial balance, or net exports (often denoted as NX).
• A distinction between a trade balance for products and one for services is occasionally drawn. A flow of exports and imports over a specific time period is measured by the balance of trade. The term "balance of commerce" does not necessarily imply that exports and imports are "equally balanced."

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