ECONOMICS
BALANCE OF TRADE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Imports-Exports
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Exports-Imports
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Either A or B
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None of the above
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Detailed explanation-1: -The formula for calculating the BOT can be simplified as the total value of exports minus the total value of its imports. Economists use the BOT to measure the relative strength of a country’s economy.
Detailed explanation-2: -GDP = C + I + G + X – M I = Investment expenditure. G = Government expenditure. X = Total exports. M = Total imports.
Detailed explanation-3: -The ratio is calculated by dividing the price of the exports by the price of the imports and multiplying the result by 100. When more capital is leaving the country than is entering the country then, the TOT will be less than 100%.
Detailed explanation-4: -Balance of trade (BOT) = Value of Exports − Value of Imports Where, BOT is the Balance of trade or trade balance. Value of exports is the value of goods that are exported out of the country and sold to buyers of other countries.
Detailed explanation-5: -Net exports = Total exported goods and services-Total imported goods and services. Net exports as GDP percentage = (Net exports in dollar amount / GDP) x 100. Net imports = Total imported goods and services-Total exported goods and services. 03-Feb-2023