Question

When the net earning from foreign trade is zero, it largely impacts the national income.

• A. True
• B. False

Answer 1

The correct option is B False

Import refers to purchasing of goods and services from international market in the country and export refers to selling goods and services in the international market. So export is an income for the country whereas import is an expense for the country. Therefore, when export is equal to imports then the net earnings from the trade of a country is zero which does not impact the national income as the earnings from foreign trade is added to the national income of an economy.