Pierre has 5 europounds and 10 europounds worth of Camembert.
Peter has 10 europounds and 5 europounds worth of Cheddar.
Pierre sells his Camembert to Peter for 10 europounds.
Peter sells his Cheddar to Pierre for 5 europounds.
Pierre had 15 europounds of money and goods.
Peter had 15 europounds of money and goods.
Pierre now has 15 europounds of money and goods.
Peter now has 15 europounds of money and goods.
All perfectly balanced.
But wait!
Peter's imported goods = 10 europounds.
Peter's exported goods = 5 europounds.
Peter now has a 'balance of trade deficit' of 5 europounds!
Friday, 4 March 2016
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