Question

The main reason for the enormous gap between imports and exports was due to ________________.

• A. deteriorating terms of trade
• B. unfavourable balance of trade
• C. unfavourable balance of payments
• D. disequilibrium in balance of payments

Answer 1

The correct option is A deteriorating terms of trade

The main reasons of enormous gap between imports and exports are:

1. Trade : The products which was imported where capital products which had a huge cost and products which were exported were agricutural products as India was an agricultural country.
2. Lack of support : The export always lacked support from goverment of country and from financial institutions.
3. Lack of production : The country always lacked in production of agricultural products which also created a huge gap between imports and exports.

These are the reason why there was an enormous gap between imports and exports of the country.