Question

When does a trade deficit occur?

• A. When exports are greater than imports.
• B. When imports are greater than exports.
• C. When imports are equal to exports in a country.
• D. When savings are greater than expenditure.

Answer 1

The correct option is B When imports are greater than exports.

Trade deficit is a situation which arises when the values of a country's imports goods is greater than the value of goods that it exports.