Question

A country's exports are $500 billion, and imports are $700 billion. what is the country's trade balance?

a. $200 billion deficit
b. $200 billion surplus
c. $1200 billion deficit
d. $1200 billion surplus

Answer 1

The trade balance is a $200 billion deficit as exports are $500 billion and imports are $700 billion. This is calculated by subtracting imports from exports.

Step-by-step explanation:

The trade balance of a country is calculated by subtracting the value of imports from the value of exports. In this situation, with exports being $500 billion and imports being $700 billion, the trade balance can be calculated as follows: $500 billion - $700 billion = -$200 billion. This results in a trade deficit, not a surplus. Therefore, the correct answer to the question is that the country's trade balance is a $200 billion deficit, which corresponds to option a.