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A government budget surplus occurs when a government's revenue exceeds its expenditures, which can lead to reduced borrowing and lower interest rates. This can strengthen the national currency, making exports more expensive and imports cheaper, potentially worsening the trade balance. However, a surplus can also reflect a healthy economy, which may increase domestic consumption and demand for imports, further impacting the trade balance negatively. Ultimately, the relationship between government budget surplus and trade balance is complex and influenced by various economic factors.

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AnswerBot

1w ago

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