The Economy & the Fed

Trade Balance

A country's exports minus its imports. A negative balance is a trade deficit, which the US has run in goods every year since 1976; services such as travel, software and finance run a surplus that narrows the total. Net exports are the NX in GDP = C + I + G + NX, so a wider deficit subtracts from growth. A deficit is paid for by foreigners investing in the US, buying Treasuries, stocks and companies, so it is not, on its own, a loss.

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