Question

If nation's imports for one year are worth $5.2 billion and its exports are worth $5.3 billion the same year, that nation has

A a trade deficit, or negative trade balance
B a trade surplus, or positive trade balance
C a negative balance of payments
D a positive balance of payments

Answer 1

Answer:

B

Explanation:

Answer 2

Answer:

B. Positive trade balance

Explanation:

A country has  trade surplus if its exports are more than its imports. If its imports are more than its exports then the country has trade deficit.Trade surplus is a positive development while deficit is seen as negative.

If a country persistently faces trade deficit then it can affect economic stability and growth. More imports means that domestic jobs are lost to those abroad. Tax capital inflows, Depreciating the exchange rate, decreasing consumption and increasing the savings are three ways to reduce the trade deficit.