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1.
A deficit leads to lower aggregate demand and therefore slower growth
2.
In the long run, persistent trade deficits undermine the standard of living
3.
Trade deficit can lead to loss of jobs in home-based industries
4.
Deficit countries need to import financial capital to achieve balance
5.
A trade deficit can lead to currency weakness and higher imported inflation
6.
Countries may run short of vital foreign currency reserves
7.
A trade deficit is a reflection of lack of price / non-price competitiveness
8.
Currency weakness can lead to capital flight / loss of investor confidence"