Question

please explain reduction in trade deficit and how do it affect the growing of imports in the country.
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Answer 1

Explanation:

A trade deficit creates downward pressure on a country's currency under a floating exchange rate regime. With a cheaper domestic currency, imports become more expensive in the country with the trade deficit. Consumers react by reducing their consumption of imports and shifting toward domestically produced alternatives.

Answer 2

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A trade deficit is an amount by which the cost of a country's imports exceeds its exports. It's one way of measuring international trade, and it's also called a negative balance of trade. You can calculate a trade deficit by subtracting the total value of a country's exports from the total value of its imports.