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Sometime ago, I wrote about how money coming into a region from outside of the area for locally produced goods and services is considered “good money”. That money is an important addition to the local economy.

If we remember high school social studies, we learned about “balance of trade”. Balance might be a misnomer as it rarely is a balance for any period. The balance of trade signifies the difference of exports and imports over a specified period, usually a year.

If the cost of goods imported is more than the cost exported, it is referred to as a trade deficit. Conversely, if more is exported than imported it is termed a trade surplus. It is easy to see the greater amount of money coming in than going out is “good” money, just like the earlier example but on a greater scale.

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