December’s UK trade deficit is largest since 1697.

Sites to Visit for More Information:

1. Office for National Statistics

Questions:

1. How does the United Kingdom pay for its trade deficit?
2. Where is a trade deficit recorded in the balance of payments accounts?
3. Explain the role of comparative advantage in determining which goods and services a country exports and imports.
4. Would you support a rise in tariffs to decrease the trade deficit?
5. What effect would a cut in the interest rate have on the UK trade deficit? Why?

Chapters: 33, 34

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