Question

What do you mean by surplus trade ? why the balance of trade us always favourable for britain in terms of india

Answer 1

Answer:

The Balance

Balance of Trade: Favorable Versus Unfavorable

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GLOSSARY TRADE POLICY

Balance of Trade: Favorable Versus Unfavorable

Model scales showing balance of assets, including automobiles and oil barrels

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The Danger When Imports Exceed Imports

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BY KIMBERLY AMADEO

Updated June 25, 2019

The balance of trade is the value of a country's exports minus its imports. It's the most significant component of the current account. That also makes it the biggest component of the balance of payments that measures all international transactions.

The trade balance is the easiest component to measure. All goods and many services must pass through the customs office.

The current account measures a country's net income earned on international assets. The current account also includes trade balance plus any other payments across borders.

Answer 2

Surplus trade:

• The balance of trade is difference between value of imports and value of exports.
• When the difference is negative, then it is unfavourable balance of trade. The condition is trade deficit.
• When the difference is positive, then it is favourable balance of trade. The condition is trade surplus.

Balance of trade:

• Economic stability (majorly) and political stability of a country depends on the balance of trade.
• There is favourable balance of trade for Britain in terms of India because India exports majorly to Britain and imports less from Britain.
• Likewise, Britain prefers to import more from India than export.
• Thus, India faces trade deficit and Britain enjoys trade surplus.
• Total value of exports - Total value of imports = Balance of trade