If the surplus balance on the service account exceeds the deficit balance on the merchandise account, the goods and services balance will be in surplus ,the statement is False.
What is surplus balance?
- The balance of trade in goods and services includes the balance of trade in services and the balance of trade in items.
- It must be the case that the surplus in the services balance outweighs the deficit in the merchandise balance if the goods and services balance is in surplus and the merchandise trade balance is in deficit.
- The surplus in the merchandise balance must be greater than the deficit in the services balance if the goods and services balance is in surplus and the services balance is in deficit.
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