ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -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-2: -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-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).

Detailed explanation-4: -A trade surplus occurs when a country exports more than it imports. A country’s trade balance can be calculated from a simple formula: Total Value of Exports-Total Value of Imports. When a country exports more than it imports, its currency rises in value relative to other currencies.

Detailed explanation-5: -A trade deficit occurs when a country imports more than it exports. A trade deficit typically also has the opposite effect on currency exchange rates. When imports exceed exports, a country’s currency demand in terms of international trade is lower.