What economic condition occurs when a country imports more goods than it exports?

When a country imports more goods than it exports, it is experiencing a trade deficit. This situation indicates that the value of the goods and services purchased from other countries exceeds the value of those sold to foreign markets. A trade deficit can affect a nation's economy in various ways, such as leading to borrowing from foreign lenders or selling domestic assets to finance the difference.

A trade surplus is the opposite scenario, where exports exceed imports. Fiscal responsibility pertains to government financial management, ensuring that expenditures do not exceed revenues, while the balance of payments is a broader accounting of all economic transactions between residents of a country and the rest of the world, including trade in goods and services, capital flows, and financial transfers. Thus, understanding that a trade deficit specifically refers to the imbalance of imports exceeding exports is crucial for grasping the economic implications involved.