CIMA BA1 Syllabus A. Macroeconomic And Institutional Context Of Business - Balance Of Trade And The Trade Cycle - Notes ^{13 / 17}

Balance Of Trade And The Trade Cycle

In a boom we probably have a Trade Deficit (Imports > Exports)

In a recession we probably have a Trade Surplus (Imports < Exports)

• Boom Phase

  Imports will be high as consumers have more money 

  (Exports level depends on foreign consumers trade cycle)

• Recession Phase

  Imports will be low as consumers have little money

  (Exports level depends on foreign consumers trade cycle)