A trade deficit occurs when a nation imports more goods than it exports. In other words, a nation buys more from other countries, than it sells to other countries.
There are three types of fiscal policy; neutral, expansionary, and contractionary.
A neutral policy refers to a balanced budget. In other words, government brings in enough taxation to pay for its expenditures.
Expansionary fiscal policy is where government spends more than it takes in through taxes.
Contractionary fiscal policy is where government collects more in taxes than it spends.