Question

A trade surplus occurs when the value of imports is__________. A. less than the value of exports. B. government spending is less than total tax revenue. C. consumption is greater than disposable income. D. None of these.

Answer 1

Answer: Option A

         

Explanation: In simple words, trade surplus refers to the economic condition under which a country's value of goods sold to other countries, that is, exports is greater than the value of goods it purchases from other countries ,that is, imports.

Trade surplus is seen as a positive indicator of economic growth as a country in surplus will behaving more money to invest in public core services and wont be spending their tax collections on interest and loans taken by international assignations such as IMF or world bank.

Hence from the above we can conclude that the correct option is A.