<prompt> What is a trade deficit?  <response>: A trade deficit, also referred to as a negative balance of trade, is when a country imports more goods and services than it exports over a specific period, usually a year. This means that the value of its imports is greater than its exports, leading to an imbalance in the countrys foreign trade. A trade deficit can affect a countrys economy, as it reflects that the country is spending more foreign currency on imports than it is receiving from its exports. In some cases, prolonged trade deficits can lead to a weakening of the countrys currency, increased borrowing and rising interest rates. However, it is important to note that trade deficits are not always detrimental, as they can also reflect a strong domestic demand for foreign goods and a thriving economy. 