ECONOMICS
BALANCE OF TRADE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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trade surplus
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trade deficit
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Either A or B
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None of the above
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Detailed explanation-1: -A country has a trade deficit when the value of its imports exceeds the value of its exports. The impacts of trade deficits are frequently over-simplified. Trade deficits can be damaging but they also bring welcome economic benefits.
Detailed explanation-2: -If imports exceed exports, the country or area has a trade deficit and its trade balance is said to be negative.
Detailed explanation-3: -A trade deficit occurs when a country’s imports exceed its exports during a given time period. It is also referred to as a negative balance of trade (BOT). The balance can be calculated on different categories of transactions: goods (a.k.a., “merchandise”), services, goods and services.
Detailed explanation-4: -What causes it? The fundamental cause of a trade deficit is an imbalance between a country’s savings and investment rates. As Harvard’s Martin Feldstein explains, the reason for the deficit can be boiled down to the United States as a whole spending more money than it makes, which results in a current account deficit.
Detailed explanation-5: -1 min read . Updated: 16 Jan 2023, 04:00 PM IST Livemint. Despite global headwinds, India’s exports have held its head high, Commerce Secretary Sunil Barthwal has said.