## How to calculate trade deficit percentage

Deficit, if total revenue is small than total expenditure. Budget defict = Total What is the relationship between fiscal deficit and current account deficit? 10,944 Views Why does fiscal deficit need to be 3 percent of GDP? 3,305 Views.

## Debt is the total amount that you owe. Deficit is how much you are adding to your debt. If I owe \$1,000 in debt, and am spending \$200 per month, and earning only \$150, then my deficit is \$50, but my debt is currently \$1,000.

To calculate a deficit (or surplus), you subtract the total value of exports from the total value of imports. In 2017, the U.S. had a total trade deficit of \$566 billion for both goods and services. In each pair of global entities, there will be one with a surplus and one with a deficit. The way to calculate this balance of trade is to take the total value of all imports and subtract the total value of all exports between the two countries, or between one country and the rest of the world. In effect, an economy with a trade surplus lends money to deficit countries whereas an economy with a large trade deficit borrows money to pay for its goods and services. In some cases, the trade balance may be correlated to a country’s political and economic stability as it reflects the amount of foreign investment in that country. In the example above Canada is operating a trade deficit and thus has a debt to the USA. Example 1 - Calculating balance of trade with one good. Consider a simple example which 2 countries, Country A and Country B, who both only produce one good. Country A produces wine and Country B produces cheese. Suppose the price of wine is \$2 and the price of cheese is \$1. Suppose that Country A exports 5 units of wine and imports 3 units of cheese. The balance of trade for Country A is: