ECONOMICS
BALANCE OF TRADE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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When the value of exports exceeds the value of imports
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when the value of imports exceeds the value of exports
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when the values of imports and exports are equal
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when the value of imports for one nation is greater than the value of imports for another nation
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Detailed explanation-1: -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-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: -A trade surplus is an economic measure of a positive balance of trade, where a country’s exports exceed its imports. It is the opposite of a trade deficit.
Detailed explanation-4: -Trade deficit is said to take place when the imports done by a country exceed that of the exports done by a country in a fiscal year. The trade deficit is also termed as the negative balance of trade.
Detailed explanation-5: -Trade Deficit=Value of Imports-Value of Exports It includes various goods and services exported and imported by the government, like machinery, cars, consumer goods.