ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The formula for net exports is a simple one: The value of a nation’s total export goods and services minus the value of all the goods and services it imports equals its net exports. A nation that has positive net exports enjoys a trade surplus, while negative net exports indicate that the nation has a trade deficit.

Detailed explanation-2: -The balance of trade is the value of a country’s exports minus its imports. It’s the biggest component of the balance of payments that measures all international transactions.

Detailed explanation-3: -A positive balance of trade, also known as a trade surplus, occurs when a country exports more goods than it imports. This means that the country is earning more from its exports than it is spending on its imports, and it is generally seen as a sign of economic strength.

Detailed explanation-4: -The value of goods exported to a foreign country by residents according to international trade statistics.

Detailed explanation-5: -Therefore, the formula for calculating the balance of trade or BOT is as follows: 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.