Question

Trade: Read the adjoining table and
Year
answer the following questions.
graph

> What is balance of trade?
2010-11
> Tell the types of balance of trades.
In which country export exceeds
2011-12
import in all the years?
2012-13
> Brazil's balance of trade belong
to which type?
India 's balance of trade belong to which
type?​

Answer 1

a. The balance of trade is the difference between export and a. The balance of trade is the difference between export and a. The balance of trade is the difference between export and

import between a given period of time. It is an important

component of the Balance of Payment. It measures the economic

strength of the country's economy

The balance of Trade = Export-Import

b. The balance of trade is the difference between export and

import between a given period of time. The balance of trade can

be of three types:

• Favourable balance/Surplus: It is the situation where exports

are greater than imports. It is always good for a country to

maintain a favourable BOT.

• Unfavourable balance/Deficit: It is the situation where imports

are greater than exports. For every developing country, the

BOT would be largely unfavourable with imports greater than

exports.

• Equilibrium balance: It is the situation where imports are equal

to exports. It is very difficult for any country to maintain

equilibrium in BOT.

c. Exports exceed imports in all the years in Brazil. Brazil is always

maintaining a favourable BOT where exports are greater than

imports. It is always good for a country to maintain a favourable

BOT.

d. Brazil's BOT belongs to the favourable balance/surplus BOT

category. It is the situation where exports are greater than

imports. It is always good for a country to maintain a favourable

BOT.

e. India’s BOT belongs to the unfavourable balance/deficit

category. It is the situation where imports are greater than

exports. For every developing country, the BOT would be largely

unfavourable with imports greater than exports.