Answered: Why is the bilateral trade deficit…

Why is the bilateral trade deficit between 2 countries a bad measure of whether those countries treat each other fairly? Give an example, for instance trade between Japan and Saudi Arabia

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter23: The International Trade And Capital Flows

Section: Chapter Questions

Problem 30RQ: What three factors will determine whether a nation has a higher or lower share of trade relative to...

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Question

Why is the bilateral trade deficit between 2 countries a bad measure of whether those countries treat each other fairly? Give an example, for instance trade between Japan and Saudi Arabia

Definition Definition Situation in which a country spends more on imports than it makes through exports. When a trade deficit exists, net exports will be negative. Trade Deficit = (Imports) - (Exports)

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