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Deficit

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Definition of Deficit

Deficit Image 1

Deficit

An excess of liabilities over assets, of losses over profits, or of expenditure over income.


Deficit

Anegative balance in the retained earnings account that is caused by cumulative
losses that exceed the amount of equity.


Deficit

See budget deficit.



Related Terms:

Budget deficit

The amount by which government spending exceeds government revenues.


Budget Deficit

The excess of government spending over tax receipts.


Structural Deficit

The budget deficit in excess of the deficit that in the long run keeps constant the ratio of the publically held national debt to GDP.



Trade Deficit

deficit on the balance of merchandise trade.


Twin Deficits

The trade deficit and the government budget deficit.


Deficit Image 2

J-curve

Theory that says a country's trade deficit will initially worsen after its currency depreciates because
higher prices on foreign imports will more than offset the reduced volume of imports in the short-run.


National Debt

The debt owed by the government as a result of earlier borrowing to finance budget deficits. That part of the debt not held by the central bank is the publically held national debt.


Official Settlements Account

An account within the balance of payments accounts showing the change in a country's official foreign exchange reserves. It is used to measure a balance of payments deficit or surplus.


Sterilization

Central bank action offsetting money supply changes automatically generated by a balance of payments surplus or deficit under a fixed exchange rate system.



 

 

 

 

 

 

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