Question

If the United States imports $100 billion worth of goods and services from Mexico and exports $75 billion worth of goods and services to Mexico, then:

A) The U.S. has a trade surplus with Mexico.
B) The U.S. has a trade deficit with Mexico.
C) The U.S. has balanced trade with Mexico.
D) The U.S. has neither a surplus nor a deficit with Mexico.

Answer 1

The U.S. has a trade deficit with Mexico (option B) as it imports more ($100 billion) than it exports ($75 billion) to Mexico.

Step-by-step explanation:

When the United States imports $100 billion worth of goods and services from Mexico and exports $75 billion worth of goods and services to Mexico, the U.S. has a trade deficit with Mexico. This is because the amount of imports exceeds the amount of exports. A trade deficit occurs when a country's imports are greater than its exports, indicating that more money is flowing out of the country to pay for foreign-made products and services than is coming in from selling domestically produced goods and services abroad.