Question

What is the status of Farbenia’s balance of trade?

The republic of Farbania has trade relations only with Russia. In one year, Farbania imports $300 million worth of goods from Russia. In the same year, Farbania sells $200 million worth of goods to Russia. Therefore, Farbenia had a
in its balance of trade with Russia.

Answer 1

Farbania has a negative trade balance with Russia, that is, a deficit of $100 million.

Step-by-step explanation:

Given that the republic of Farbania has trade relations only with Russia, and in one year, Farbania imports $ 300 million worth of goods from Russia and sells $ 200 million worth of goods to Russia, to determine the balance of trade that this country has with Russia is must perform the following calculations:

Imports: -300,000,000

Exports: +200,000,000

-300,000,000 + 200,000,000 = X

-100,000,000 = X

Therefore, Farbania has a negative trade balance with Russia, that is, a deficit.