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The difference between a country's merchandise exports and its merchandise imports is the:
- a)Current account.
- b)Capital account
- c)Balance of trade
- d)Balance of payments
Correct answer is option 'C'. Can you explain this answer?
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The difference between a countrys merchandise exports and its merchand...
Balance of Trade
The difference between a country's merchandise exports and its merchandise imports is known as the "Balance of Trade." This is a key component of a country's overall economic health, as it reflects the amount of goods that a country is producing and selling to foreign markets compared to the amount that it is buying from foreign markets.
Importance of Balance of Trade
The balance of trade is important because it can impact a country's currency exchange rate, which in turn can affect the price of imports and exports. A country that exports more than it imports will typically experience an increase in demand for its currency, which can cause the currency to appreciate in value. On the other hand, a country that imports more than it exports will typically experience a decrease in demand for its currency, which can cause the currency to depreciate in value.
Conclusion
In summary, the balance of trade is a key component of a country's overall economic health. It reflects the amount of goods that a country is producing and selling to foreign markets compared to the amount that it is buying from foreign markets. The balance of trade can impact a country's currency exchange rate, which in turn can affect the price of imports and exports.
The difference between a country's merchandise exports and its merchandise imports is known as the "Balance of Trade." This is a key component of a country's overall economic health, as it reflects the amount of goods that a country is producing and selling to foreign markets compared to the amount that it is buying from foreign markets.
Importance of Balance of Trade
The balance of trade is important because it can impact a country's currency exchange rate, which in turn can affect the price of imports and exports. A country that exports more than it imports will typically experience an increase in demand for its currency, which can cause the currency to appreciate in value. On the other hand, a country that imports more than it exports will typically experience a decrease in demand for its currency, which can cause the currency to depreciate in value.
Conclusion
In summary, the balance of trade is a key component of a country's overall economic health. It reflects the amount of goods that a country is producing and selling to foreign markets compared to the amount that it is buying from foreign markets. The balance of trade can impact a country's currency exchange rate, which in turn can affect the price of imports and exports.
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The difference between a countrys merchandise exports and its merchandise imports is the:a)Current account.b)Capital accountc)Balance of traded)Balance of paymentsCorrect answer is option 'C'. Can you explain this answer?
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