Balancing the federal budget and U.S. international trade deficits. (effects of a balanced federal budget on the balance of payments)(includes means of attaining trade balance)

From: Business Economics | Date: October 1, 1997| Author: Akhtar, Michael A. | Copyright information

The projected balancing of the federal budget by 2002 will not eradicate the US trade deficit even if national savings rises. A balanced budget may reduce the local demand for imported products only in the medium term by causing the depreciation of the dollar. However, this event is expected to have very minimal effect on the trade deficit. The only way to shift local demand from goods made by low-wage economies to US made ones is by making US products more competitive in terms of quality and...

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