Question

Suppose the country of Lilliput exported $ 293 billion worth of goods and imported $ 405 billion worth of goods in the last calendar year. Calculate Lilliput's balance of trade. $ −112 billion Which type of trade balance is Lilliput running?

neither a trade deficit nor a trade
surplus a trade
surplus a trade deficit

Answer 1

A trade deficit.

Step-by-step explanation:

Given that,

Value of exports = $293 billion

Value of imports = $405 billion

Balance of trade refers to the difference between a country's value of exports and its value of imports for a given time period.

Balance of trade:

= Value of exports - Value of imports

= $293 billion - $405 billion

= -$112 billion

Therefore, this country has a negative trade balance and it is reflected as a trade deficit.