188k views
2 votes
In recent years, the United States has had a relatively low trade deficit compared to its GDP. How has this affected the US economy?

User GeauxEric
by
8.1k points

1 Answer

3 votes

Final answer:

A low trade deficit compared to the GDP can have positive effects on the US economy, including GDP growth, job creation, and impact on industries and workers.

Step-by-step explanation:

The United States' trade deficit refers to the amount by which the value of imports exceeds the value of exports. When the trade deficit is low compared to the GDP, it can have several effects on the US economy.

1. Positive impact on GDP growth: A low trade deficit indicates that the US is exporting more goods and services, which contributes to the growth of the GDP.

2. Job creation: Increased exports can lead to the creation of more jobs in the US, as businesses need to expand their workforce to meet the demand for their products abroad.

3. Effect on industries and workers: A low trade deficit can also affect specific industries and workers. When the US exports more, it may shift workers and physical capital investment towards industries that are more export-oriented.

User Ari Herman
by
8.1k points