By levidesmond69 on Skatehive
Do trade deficit matters? First what is trade deficit? Trade deficit is simply a negative balance of trade which occurs when a country imports more goods and services than it exports Effects of trade policy include domestic industries shutdown due to heavy reliance on foreign goods by the domestic market, and this could affect employment, and also economic growth. According to Adam Smith a country progressive should not be measured on paper or rather according to the amount of gold and silver it has accumulated over time ( that's opposing the dominant economic policy which is the mercantilist system during his time). Adam Smith Idea was that the productive capacity and overall standard of living of a country supersedes the accumulation of Gold and silver through trade surplus. Therefore Nations should specialize in what they produce best and trade freely with other nations. Is Adam Smith Idea correct? Well yes in some aspects and no on other aspects over the years countries like the Un