Final answer:
A credit balance in Market Adjustment-Trading Securities represents an increase in market value, not a realized profit. An increase in either demand or supply of loans will generally increase the quantity of loans made and received. A trade surplus indicates an inflow of financial capital, while a trade deficit means an outflow.
Step-by-step explanation:
A credit balance in the account Market Adjustment-Trading Securities at the end of a year indicates that the market value of the securities has increased beyond their cost. This is because the Market Adjustment account reflects changes in the fair value of trading securities that a company holds. If the fair value increases, it is adjusted with a credit (assuming the account had a zero or debit balance initially). Therefore, a credit balance represents an increase in market value, which can potentially lead to profits if the securities were sold at that increased market value. However, until the securities are sold, the increase is unrealized and is not considered a profit as such.
Regarding the changes in the financial market that will lead to an increase in the quantity of loans made and received, both a rise in demand for loans and a rise in supply of loans can lead to more loans being made. A rise in demand would indicate that more borrowers are looking to take out loans, while a rise in supply means that lenders are more willing to provide loans. In either case, the increased demand or supply typically encourages the facilitation of more loans.
In international trade, a trade surplus means that a country exports more than it imports, which usually results in an overall inflow of financial capital to the economy because foreign buyers expend their capital to pay for the country's exports. Conversely, a trade deficit occurs when a country imports more than it exports, leading to an overall outflow of financial capital since the nation is spending more capital on foreign products.