The book defines balance of trade as "The Ratio of what is paid for imports to what us earned from exports. When more is imported than exported, there is a balance-of-trade deficit."(Edwards 728) . The concerns regarding America's balance of trade is that we are importing more than we are exporting. We have a huge trade deficit that we have to solve for.
Year after year, the American balance of trade has been preceded by a minus sign, and the deficit for the balance of trade was $716 billion in 2007. This furthers the concerns regarding America's balance of trade. The excess of imports over exports decreases the dollar's buying power against other currencies, making Americans pay more for goods that they buy from other nations. This decline in the value of the dollar, however, also makes American products cheaper abroad, thereby increasing our exports. (Edwards, 650-651)
I agree that the U.S. importing more than it is exporting is a major concern because, like Mallory said, it decreases the value of the dollar. When the value of our currency decreases, then the nation as a whole can become poorer. To overcome such a decrease in value, the U.S. should start exporting goods that other nations might need to survive and thrive, rather than just importing all of the goods we need or want. Also, the U.S. could produce some of the goods it imports so that the import-export ratio will become a little more balanced.
The book defines balance of trade as "The Ratio of what is paid for imports to what us earned from exports. When more is imported than exported, there is a balance-of-trade deficit."(Edwards 728) . The concerns regarding America's balance of trade is that we are importing more than we are exporting. We have a huge trade deficit that we have to solve for.
ReplyDeleteYear after year, the American balance of trade has been preceded by a minus sign, and the deficit for the balance of trade was $716 billion in 2007. This furthers the concerns regarding America's balance of trade. The excess of imports over exports decreases the dollar's buying power against other currencies, making Americans pay more for goods that they buy from other nations. This decline in the value of the dollar, however, also makes American products cheaper abroad, thereby increasing our exports. (Edwards, 650-651)
ReplyDeleteI agree that the U.S. importing more than it is exporting is a major concern because, like Mallory said, it decreases the value of the dollar. When the value of our currency decreases, then the nation as a whole can become poorer. To overcome such a decrease in value, the U.S. should start exporting goods that other nations might need to survive and thrive, rather than just importing all of the goods we need or want. Also, the U.S. could produce some of the goods it imports so that the import-export ratio will become a little more balanced.
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