Question

Which one of the following does not describe balance of​ trade? a. Balance of trade is the largest item in the current account. b. Balance of trade shows when imports are larger than exports​, there is a trade deficit. c. Balance of trade is equal to the sum of current account balance and financial account balance. d. Balance of trade is the difference between the value of goods a country exports and the value of goods a country imports.

Answer 1

Answer:

c. Balance of trade is equal to the sum of current account balance and financial account balance.

Explanation:

The balance of trade is the difference in value between a country's imports and its exports over time. Balance of trade ( BOT) is expressed in monetary terms. If a country has more exports than imports, it has a positive trade balance or a trade surplus. Balance of trade is also known as international trade balance or trade balance.

Economists use the balance of trade in determining the country's current account. A trade deficit or trade surplus on its own does not mean that the economy is weak or strong in that period. The balance of trade is obtained by subtracting net imports from net exports.