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Sample Essay on Business Study

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Sample Essay on Business Study

Depending on the condition in terms of the value of goods a country exports and the value of goods imported by the nation, a nation can have a trade deficit, where the goods bought outside the nation are more than what the nation sells outside depending on the financial position of the country. In this case, the deficit can either be favorable or unfavorable. The United States of America has been on a deficit for long.  In this case, the trade deficit is not harmful because it helps the country obtain some capital from foreigners to finance the investments that are in the country thus the economy grows (Mann 85). In addition to this, the level of investment increases as many investors are attracted by the good performance of the economy. However, it is necessary that the country puts into consideration the immaterial nature of trade deficits. In this case, a trade deficit ought not to reflect the preferences of the consumers only but a growing economy.

Trade deficit in the US has some long-term consequences. Apart from being a source of revenue to finance the country’s investments, the trade deficit helps to boost employment in the country. Many investors are attracted to the country and therefore, some come with their projects that provide employment to the citizens. This leads to people who work there earn high incomes that continue to raise their living standards (Lee 151). Consumers gain their confidence in the commodities that are produced in the country. This increases the number of sales of these products, thus economic development. As consumers gain confidence in the products produced, making sales to increase, the level of production increases thus industrialization growing fast. With industrialization developing at such a rate, the level of technology heightens and this is one of the reasons that the US has gained superiority over other countries in the world.

Works cited

Mann, Catherine L. Is the Us Trade Deficit Sustainable? Washington, DC: Inst. for Internet Economics, 1999. Print.

Lee, Sharon, and Steve Miller. Balance of Trade: A Liaden Universe Novel. New York: Ace Books, 2006. Print.


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