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Why is surplus important to an economy?

A trade surplus is really great because this means that inflation and unemployment is low and prices are reasonable in a country. It's also an encouraging environment for foreign investment. A trade surplus shows that an economy is strong and growing. The issue with many developing countries is that they are experiencing a negative trade balance.

What is surplus mean in economy?

The basic definition of economic surplus is that the financial assets of an entity, such as a market, business, government, or individual, exceed its financial liabilities . This basic definition however, is only a jumping-off point for describing the many forms of economic surplus.

What is the definition of a surplus economy?

Economic Surplus. An economic surplus is related to money , and it reflects a gain in the expected income from a product. There are two types of economic surplus: consumer surplus and producer surplus. Consumer surplus occurs when the price for a product or service is lower than the highest price the consumer would pay.


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