When do an unfavorable balance of trade occurs?

0
210
ecommerce, selling online, online sales @ Pixabay

What is the balance of trade?

The balance of trade is a measurement that tracks the difference between how much money crosses borders in both directions. If exports are greater than imports, then this is considered to be a favorable balance of trade. On the other hand, if imports exceed exports, then this would be an unfavorable balance of trade. One example of an unfavorable balance of trade would be when China sends more goods and services across its border with America than it receives from America.

money, bag, cash @ Pixabay

This can cause problems for countries who have deficits in their balances because they will need to borrow funds from elsewhere or sell off assets like stocks and bonds to make up for it. The disadvantages of an unfavourable balance of trade are that some countries will need to borrow funds from elsewhere or sell off assets like stocks and bonds to make up for it.

What is the balance of trade? The balancing measure tracks the difference between how much money crosses borders in both directions. If exports are greater than imports then this would be considered a favorable balance of trade. On the other hand if imports exceed exports then this would be an unfavorable one.” One example of an unfavorable balance is when China sends more goods and services across its border with America than it receives from America which can cause problems for countries with deficits.

LEAVE A REPLY

Please enter your comment!
Please enter your name here