Goals of Macroeconomics: Balance of International Trade

The goal of balance of international trade is the difference between a nations exports and imports. Exports sell to other countries so money is coming in. Imports is buying from other countries so money is going out.
Trade surplus- exports are higher than imports
Trade deficit- when imports are higher than exports

It is measured by exports-imports

The optimal trade rate is 80-90 cents to the US will by Canadian products. if 1 CAD=1.10 USD then the US wont buy Canadian products so exports go down and imports go up so there will be a trade deficit. It impacts interest rate because as money leaves the country other countries can send or invest in Canada.


Dr. Stephanie Powers, "Goals"(Lecture, Donald School of Business, Red Deer AB, Winter 2012)