Question

If the value of imports for the current year is $3 billion and the value of exports is $8 billion, what effect will this have on the country’s trade balance?

A. There will be a trade deficit.
B. There will be no effect.
C. There will be a trade surplus.
D. The trade deficit will increase.

#PLATO

Answer 1

There will be a trade surplus of 5 billion dollars (since the country is exporting the equivalent of 5b dollars more than it imports).

A trade surplus is basically the difference between the export and import amount. Note that it only refers to cases where exports exceede the import amount. In other words, it is the countriestrade profit.

Hope it helped,

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