Question A
According to Gregory Mankiw (2011), trade balance reflects the difference between net worth of exports and imports in a given country. Consequently, positive trade balance suggests in monetary value country exports more than it imports, while negative trading balance (trade deficit) is associated with dominance of imports over exports. Economists argue that trade deficit is not always considered to have a negative impact on the national economy, however it often creates potential risks which may result in harsh economic consequences if they are not addressed properly. For example, if net exports are negative it is assumed that proceedings from ...