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Q. |
A country's balance of trade is unfavorable when — |
A. | exports exceed imports |
B. | imports exceed exports |
C. | terms of trade become unfavorable |
D. | None of these |
Answer» B. imports exceed exports | |
Explanation: The balance of trade, or net exports is the difference between the monetary value of exports and imports of output in an economy over a certain period. It is the relationship between a nation's imports and exports. A positive balance is known as a trade surplus if it consists of exporting more than is imported: a negative balance is referred to as a trade deficit or, informally, a trade gap. |
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