Balance of trade deficit

Balance of trade is the relationship between export and import ,export minus import .So if export more than import it is a balance of trade surplus ,if the import is more the export there is a balance of trade deficit. Of course we know that a balance of trade deficit is not a good thing so we have to think about something to solve it.So then let's discuss about it .

There are several things we can do to reduce balance of trade deficit:

1. Increase interest rate ,If we increase interest rate people will save more and the consumption will fall So the aggregate demand of import will fall,So that's can help to solve the deficit.But there is also a negative thing it's the unemployment will rise.
2. Or what we could do is to decrease the interest rate to make the currency depreciate then the export will be more and the import will be less.But also if we do that we may also lose our revenue because the price of the important import will be increase.
3. And the last one is we should make our export more competitive : for example encourage investment , and increasing productivity , education /training,... So if our products are competitive the export will increase and the import will decrease. But still there also have a disadvantage it is those things will happen too slow to affect the economy.

Anyway we know we don't want a deficit in balance of trade ,if we have a surplus our aggregate demand will be more and our real GDP will increase and also our Economy will be healthier...