ECONOMICS (CBSE/UGC NET)

ECONOMICS

BALANCE OF TRADE

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

The country of Algonia produced and then shipped out $5 billion in goods and services to other nations. It brought in $4 billion in goods and services? What does this country have?

A	A balanced budget
B	A trade deficit
C	A trade balance
D	A trade surplus

Explanation:

Detailed explanation-1: -What Is an Export? Exports are goods and services that are produced in one country and sold to buyers in another. Exports, along with imports, make up international trade.

Detailed explanation-2: -If exports exceed imports then the country has a trade surplus and the trade balance is said to be positive. If imports exceed exports, the country or area has a trade deficit and its trade balance is said to be negative.

Detailed explanation-3: -If the value of exports exceeds the value of imports, it is said that there is a trade surplus; if imports are greater than exports, the country has a trade deficit.

Detailed explanation-4: -C = Consumer expenditure. I = Investment expenditure. G = Government expenditure. X = Total exports. M = Total imports.

There is 1 question to complete.