1. Define Exports

Exports can be defined as goods and services produced in one country and sold to another. They produce an inflow of money into the producing country which supports jobs in that country.

2. Define Imports

Imports can be defined as spending by individual consumers, business firms, and government for the purchase of goods and services produced in another country and shipped to the buying country. Imports create an outflow of money from the buying country to the producing country.

3. Explain how the trade deficit is measured and why increasing import prices have outweigh growing exports to result in the growth of the U.S. trade deficit. Who measures the trade deficit on a regular basis?

The trade deficit is measured by the difference between exports and imports. This difference is referred to as net exports and can be either positive or negative. When net exports are positive, that country has a trade surplus. When net exports are negative, as is the case with the U.S., the country has a trade deficit. Currently, with the price of imported goods is rising faster than the growth of U.S. exports. As a result, the total value of imports is rising faster than the total value of exports and the U.S. trade deficit continues to grow. The Bureau of Economic Analysis and the U.S. Census Bureau, two branches of the U.S. Commerce Department, work together to track the trade deficit.

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