Question

A balance of trade deficit of Rs.15,000 implies ________.

• A. import exceeds export by Rs.15,000
• B. total import Rs.15,000
• C. total export Rs.15,000
• D. export exceeds import by 15,000

Answer 1

Answer: (A)

import exceeds export by Rs.15,000

Balance of Trade: It refers to the total value of country's export commodities and total value of imports commodities. Thus, balance of trade includes only visible trade , ie movement of goods (exports and imports of goods.) Balance of trade is a part of the balance of payment statement. It is in equilibrium when visible exports match visible imports. Thus a balance of trade deficit of 15,000 implies that imports exceed exports by 15,000.