Trade deficit saving is less than investment

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Reference no: EM131196915

Why is it that when you have a trade deficit saving is less than investment. S-I=NX. A trade deficit just means you bought more products from foreign sellers than you sold to them. So is a trade deficit even a bad thing? And what does it have to do with saving and investment. Doesn't that only effect domestic production? If you have a trade surplus why does it mean your saving is more than your investment? I can sell more than I bought and I doesn't mean I saved more. Can someone explain the logic to me in full detail?

Reference no: EM131196915

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