Trade deficits are not inherently bad for an economy. Countries are limited in their resources, goods, and services for many reasons; it is typical to reach out to neighbours and establish trade relations. Over time, countries create differences in the amounts they trade with each other. (a) Explain why some countries are experiencing balance of trade surplus while other countries are experiencing balance of trade deficit. [10] (b) Discuss whether a country should be concerned about an increasing balance of trade deficit. [15]