Question

When a country has a trade deficit, the value of its exports is____ of its imports.
A. unconnected to
B. less than
C. equal to
D. more than

Answer 1

Answer: B. Less than

A simple example would be that the country exports say $100 worth of goods, but imports $250 worth of goods. The trade deficit would be 250-100 = 150 dollars.

Answer 2

(B) Less than.

Trade deficit:

• When a country's imports exceed its exports in value, there is a trade deficit.
• Imports and exports can be both physical products and services.
• A trade deficit simply indicates that a nation is importing more products and services than it is exporting.
• The difference between the monetary value of a country's exports and imports over a specific time period is known as the balance of trade, commercial balance, or net exports (often denoted as NX).
• A distinction between a trade balance for products and one for services is occasionally drawn.
• A flow of exports and imports over a specific time period is measured by the balance of trade.

Therefore, the correct answer is (B) less than.

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