What does a favorable balance of trade indicate?

What does a favorable balance of trade indicate?

• A. Importing more than exporting
• B. Exporting more than importing
• C. Equal trade amounts
• D. Trade with a single country

Answer: (B)

A favorable balance of trade occurs when a country exports more goods and services than it imports. This situation is beneficial as it often leads to increased revenues for domestic businesses and can result in a stronger national economy. When exports exceed imports, it may contribute positively to the country’s gross domestic product (GDP) and can improve international economic standing. Such a trade balance suggests that domestic industries are competitive on a global scale and that the country is able to provide goods and services that are in demand abroad. This concept is crucial in understanding international trade dynamics and economic health.

A favorable balance of trade occurs when a country exports more goods and services than it imports. This situation is beneficial as it often leads to increased revenues for domestic businesses and can result in a stronger national economy. When exports exceed imports, it may contribute positively to the country’s gross domestic product (GDP) and can improve international economic standing. Such a trade balance suggests that domestic industries are competitive on a global scale and that the country is able to provide goods and services that are in demand abroad. This concept is crucial in understanding international trade dynamics and economic health.