What does a "trade deficit" indicate about a country's economy?

A trade deficit indicates a situation where a country's imports exceed its exports. This means that the country is buying more goods and services from other countries than it is selling to them. Trade deficits can have various implications for an economy, such as influencing currency value, affecting domestic production, and potentially leading to increased foreign debt. A persistent trade deficit might suggest a reliance on foreign goods and indicates economic factors like consumer demand, currency strength, and overall competitiveness in the global market.

In contrast, the other choices describe different scenarios: having exports greater than imports indicates a trade surplus, a balance of trade suggests equilibrium with no significant excess in either direction, and a condition of overall economic surplus refers to broader economic health beyond just trade balances. Each of these scenarios has unique impacts on a nation's economy and trade relationships.