Question

Write a note on trade surplus and deficit

Answer 1

A trade deficit is an economic measure of international trade in which a country's imports exceeds its exports. A trade deficit represents an outflow of domestic currency to foreign markets. It is also referred to as a negative balance of trade (BOT).


A trade surplus is an economic measure of a positive balance of trade, where a country's exports exceed its imports.
Trade Balance = Total Value of Exports - Total Value of Imports
A trade surplus occurs when the result of the above calculation is positive. A trade surplus represents a net inflow of domestic currency from foreign markets. It is the opposite of a trade deficit, which represents a net outflow, and occurs when the result of the above calculation is negative. In the United States, trade balances are reported monthly by the Bureau of Economic analysis

Answer 2

when export of a country are more than its import than this situation is trade surplus. And when export of a country are less than its Import then this is situation of deficit.