First Name Second Name Trade deficit in the US: Causes and Effect Instructor Date Causes and Effects of Trade deficit in the US Economy One of the most important parameters of any economy is normally its balances of trade. Basically this parameter explains the relation between inflow and outflow of resources. As it were it gives a picture of how much a country is dependent on international capital markets bilateral trade partners and so on. A trade deficit describes a scenario where a country experiences more capital inflows inform of imports and foreign capital funding. On the other hand a surplus describes a situation where more resources are going out of the country. This essay describes the trade deficit pattern in the United States economy over the last decades and refers to the causes of such a deficit and how it affected the economy. First it is important to that the US has gone through it has sometimes faced minimum or little effects as their other counterparts are the one who feel the side effects. Finally deficit periods have led to the US economy developing better capital market during foreign capital sourcing amassing positive and desired effects along the way. In light of the above discussion we have seen that there has been a continuous deficit in the US economy since the 1970s. The main causes have been foreign capital decreased savings and effect of business cycles. Despite there being negative effects such as economic instability and unemployment the deficit is not so bad as it one does not affect long term growth and two comes with some desirable effects at certain situations. References BIBLIOGRAPHY Congressional Budget office. (2000). CBO MEMORANDUM. Washington DC. Consequences t. D. (1996). David M Gould Roy J Ruffin M.D Anderson. Federal Bank reserves. [...]
The paper should about 3 – 4 pages long with one and a half spacing. Question: The US Economy is experiencing a huge trade deficit over last few decades. Explain the causes and consequences of this trade deficit on the US economy. Under what circumstances the trade deficit is really bad and under what circumstances the trade deficit is not too bad? Explain.