Question

You are given the following information. Durable good consumption 462 Residential investment 526 Imports 987 Government expenditure 1259 Receipts of factor income from abroad 45 Personal income 7863 Nonresidential investment 66 Nondurable goods 893 Exports 1056 Services 7638 Depreciation 125 Change in inventories 26 Payments of factor income abroad 59 Personal taxes 2538 Do we have a trade deficit or trade surplus

Answer 1

Answer: Trade surplus of $69

Explanation:

A trade deficit is when the imports into a country are greater than exports leaving the country and a trade surplus is the reverse.

Exports for this country are $1,056

Imports to this country are $987

Exports are greater than imports so there is no trade deficit. Instead there is a Trade surplus of:

= Exports - Imports

= 1,056 - 987

= $69