ECONOMICS
BALANCE OF TRADE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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true
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false
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Either A or B
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None of the above
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Detailed explanation-1: -If the exports of a country exceed its imports, the country is said to have a favourable balance of trade, or a trade surplus. Conversely, if the imports exceed exports, an unfavourable balance of trade, or a trade deficit, exists.
Detailed explanation-2: -Balance of trade (BOT) is the difference between the value of a country’s exports and the value of a country’s imports for a given period. Balance of trade is the largest component of a country’s balance of payments (BOP).
Detailed explanation-3: -Balance of trade is an important factor playing into the calculation of the Gross Domestic Product of a country. As part of GDP calculations, exports are added and imports are subtracted from the total. Therefore, greater the trade surplus, greater the GDP of a country.
Detailed explanation-4: -The balance of trade between a country’s goods and the balance of trade between its services are sometimes reported separately. The trade balance, also known as the international trade balance, commercial balance, or net exports, is a term used to describe the balance of commerce.