Question

Novakia is a small country that has abundant natural resources. Annually, it exports goods worth $100 billion and imports goods worth $60 billion. Also, its annual revenue through taxes is $80 billion and expenditure is $100 billion. In this scenario, what is the balance of trade of novakia? $100 billion

Answer 1

Answer: Balance of Trade is $40 billion.

Explanation:

Balance of trade of a country refers to the difference between its total value of exports and total value of imports. If the value of exports is greater than value of imports the country has a surplus balance of trade.

$Balance of Trade = Exports - Imports$

$Balance of Trade = 100 - 60 billion$

$Balance of Trade = 40 billion$

Thus, the country has a balance of trade of $40 billion.