Question

What is balance of trade in which situations is favourable and unfavourable?

Answer 1

Answer:

The difference between export and import values of a country is called balance of trade. When the value of export exceeds the value of imports, it is called favorable balance of trade. On the contrary, if the value of import exceeds the value of export, it is called unfavorable balance of trade.

Answer 2

The balance of trade of a country is determined by the production of goods and services which is linked to their imports and exports. the balance of trade is determined by subtracting the total value of imports from the total value of exports

Explanation:

• The balance o trade is considered to be in a favorable situation is when  the country is able to export more goods and services in comparison to their imports in the country.
• The unfavorable balance of trade is also known as trade deficit, occurs when the value of imports increase more than the exports. This leads fall in the economic growth of the country, leads to unemployment and brings down the growth of GDP
• The country is in a favorable position when the value of exports increase since there is a demand for the goods and services globally. As a result the value of currency goes up in the global markets

To know more about balance of trade

Which transactions determine the Balance of Trade? When is Balance of Trade in Surplus?

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