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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