Question

1.Do countries want to have an even balance of trade?  Why or why not? ______________________  If not, which do they want more of (imports or exports)?  Why?

What do countries sometimes do if they feel they are losing "power" to try to balance the trade?____________________________.

3. Briefly explain the difference between Capitalism and Socialism.  What is your opinion on why it is currently a hot topic in the US?  Explain.  

For example, if you say it is because of politics/election year...then you need to elaborate and explain why?

Answer 1

Answer 1. Balance of Trade refer the difference between the value of Contry's Import & Export for a given period and is the largest component of a country's balance of payment (BOP). Every company wants to have an Even Balance of Trade. In other words company wants to have more amount of Export than Import. As it not only strengthen its value of money but also reduces the foreign currency outflow. Hence every country like to have More exports than Imports or at least Even Balance of Trade so that it can save its value of Money.

To Balance the Trade in case of losing "Power" the country allows the Import or give some freedom for Imported material to entered to their market. They even Decrease the tariff rate or even gives exemption from duty and taxes for the Imported material.

Answer 2. Capitalisim is based on Individual Initiative and favours market mechanism over goverment intervention on the other hand Socialisim based on government planning and limitation on private control of resources. In other words in Capitalism the control is in few hands although it is in favour of Free Market to determin the Price, Income, Wealth Distribution & distribution of goods on the other hand in Socialisim it is a joint partnership of goverment with Public with Price control, ownership lies with government, redistibution of Income etc.

In current situation of COVID Pandemic many people lost their job and are difficult for them to make both ends meet. It eats not only Hard Core Earnings of the people but also the savings of life time.It is difficult for them to Survive. Due to such situation Cash crunch seen by many people. Many people migrate back to their native place as Factories are shut down, No works for the people, Hard to get the job (i.e. both Private & Government). The current year is also the Presendial election year in US. Both the situation (Election & PAN Demic Situation) increase the boiling water & eventually heat in US.Hence Capitalism Vs Socialism beacme the Hot Topic now a days in US.

Every Political Party like to use the situation for there own benefits.