BALANCE OF TRADE DEFICIT: An imbalance in a nation's balance of trade in which the payments for merchandise imports made by the country exceed payments for merchandise exports received by the country. This is also termed an unfavorable balance of trade. It's considered unfavorable because more goods are imported into the country than are exported out, meaning that domestic production is replaced with foriegn production, which then reduces domestic employment and income. A balance of trade deficit is often the source of a balance of payments deficit.

     See also | balance of trade | export | import | circular flow | balance of trade surplus | balance of payments deficit | international trade | foreign trade | domestic | foreign | current account |

BALANCE OF TRADE DEFICIT, AmosWEB GLOSS*arama, http://www.AmosWEB.com, AmosWEB LLC, 2000-2025. [Accessed: July 12, 2025].

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The ease with which an asset can be converted to money with little or no loss of value. Money, currency and checkable deposits, is the benchmark for liquidity. Money is what other assets are converted to. Different assets have differing degrees of liquidity. Financial assets have differing degrees of liquidity but tend to be more liquid that physical assets. Liquidity is important to components of the three monetary aggregates tracked and reported by the Federal Reserve System--M1, M2, and M3.

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