Question

Explain the difference in types of balances of trade.

Answer 1

The difference in types of balances of trade can be defined in 3 ways as mentioned below.

• When the value of imports is more than the value of exports, it is called ‘unfavorable balance of trade'.
• When the value of exports is more than the value of imports, it is called a ‘favourable balance of trade'.
• When the value of exports and imports is almost the same, it is called ‘balanced balance of trade’.