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Xelga [282]
4 years ago
13

When a country runs a trade deficit, it does so by:

History
1 answer:
wlad13 [49]4 years ago
6 0


The best answer is B

A trade deficit is caused when a country cannot produce all it needs and so borrows from other countries willing to loan it the funds needed to finance the purchase of imports.

A trade deficit can also occur if a domestic company manufactures a lot of its products in other countries. If the raw materials are shipped overseas to its plant, that is counted as an export. When the finished goods are shipped back home, that's counted as an import. If the imported goods value outweigh the exported raw material value, then this can be said to be a trade deficit.

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The major reasons for protecting the US from foreign goods are as follows:

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2) The government wanted to protect small industries which mean small industries should be protected by imposing trade restrictions to give them a chance to grow and develop to become more competitive. These industries were now working at a very small stage and incompetent to face the Giants of the global economy.

3) The government wanted to restrict trade as it wanted to prevent the unfair trade practices which are caused due to free trade across the countries. Each country has its trade regulations which may be unfair for some countries. Such differences lead to unfair practices in the domestic market, and when such unfair practices are evident, government restrictions become mandatory.

4) Another important reason for imposing trade barriers was that the country wants to protect national security which is caused due to free trade. National insecurity is caused due to trade when a country becomes dependent upon other countries for the supply of materials or other important resources. When it comes to national security, it is important to protect domestic industries from foreign competition.

5) Finally, trade barriers are introduced by the government for reducing the bargaining in negotiations which are caused due to foreign competition, and restriction becomes an evident asset to reduce such trade negotiations. The bargaining power of the domestic industries is greatly harmed due to foreign competition in such cases government interference becomes necessary for the protection of such industries.

To know more about trade restrictions: brainly.com/question/7580546

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