Question : What is a trade surplus?
Option 1: When a country exports more than it imports
Option 2: When a country imports more than it exports
Option 3: When a country has no trade
Option 4: When a country has a deficit in trade
Correct Answer: When a country exports more than it imports
Solution : The correct answer is (a) When a country exports more than it imports.
A trade surplus occurs when a country's exports exceed its imports. In other words, it means that a country is selling more goods and services to other countries than it is buying from them. This results in a positive balance of trade.
When a country has a trade surplus, it means that it is earning more from exports, which include goods, services, and commodities, than it is spending on imports. The difference between the value of exports and imports represents the trade surplus.
A trade surplus can be influenced by factors such as the competitiveness of domestic industries, exchange rates, trade policies, and global economic conditions. It can have economic implications, including an increase in foreign currency reserves, currency appreciation, and potential impacts on domestic industries.
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