Question

A Balance of Trade surplus exists when:

Options

• \[ V_{x} > V_{m} \]

• \[ V_{x} + V_{m} = 0 \]

• \[ V_{m} > V_{x} \]

• \[ V_{x} = V_{m} \]

Answer 1

A BoT surplus occurs when the value of goods exported (V_x) exceeds the value of goods imported (V_m), i.e., V_x > V_m. When the reverse holds (V_m > V_x), there is a BoT deficit.