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Question

Analyse the data and choose the correct option.
Exports and Imports

Exports (in US dollars) Imports (in US dollars)
Germany 1.493 billion 1.239 billion
India 323.251 million 478.884 million

A
India and Germany have a favourable balance of trade.
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B
India and Germany have an unfavourable balance of trade.
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C
India has a favourable balance of trade, but Germany has an unfavourable balance of trade.
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D
Germany has a favourable balance of trade, but India has an unfavourable balance of trade.
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Solution

The correct option is D Germany has a favourable balance of trade, but India has an unfavourable balance of trade.
Unfavourable balance of trade or negative balance of trade refers to a situation in which the value of imports is greater than the value of exports. It means that the country spends more on its imports than what it earns through its exports. Similarly, favourable balance of trade or positive balance of trade refers to a situation in which the value of exports is greater than the value of imports. It means that the country earns more through its exports than what it spends on its imports. Therefore, according to the given data, Germany experiences a favourable balance of trade, while India experiences an unfavourable balance of trade.

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