- Hoe 1 (8.16 KiB) Viewed 23 times
trade deficit in the 12
months ending in December, according to data released by the
Commerce Department on
Tuesday, signaling continued strong economic growth and vibrant
consumer demand as the
country emerges from the recession induced by the COVID-|9
pandemic.
Although a trade deficit is often cast in negative terms,
economists usually see it as a sign of
economic strength, indicating a net flow of investment into the
country.
(Source: Voice of America)
1. In the first paragraph, explain which component of the trade
balance, exports or imports,
is affected by strong economic growth in the US, causing an
increase in the US trade
deficit.
2. In the second paragraph, is the flow of investment causing a US
net capital inflow or net
capital outflow? Explain why the flow of investment must be the
same as the trade
deficit.
Hoe