Which of the following statements is true of trade surplus?
A)It is a negative balance of trade.
B)It occurs when there is a net outflow of domestic currency to foreign markets.
C)It occurs when a nation imports as much as it exports.
D)It occurs when a nation's exports exceed its imports.

Question

Quizplus · Accepted Answer

A trade surplus occurs when a nation's exports exceed its imports, meaning that the country is earning more foreign currency than it is spending. This is sometimes referred to as a "favorable" balance of trade, as it can lead to increased employment, economic growth, and currency strength. Option A is incorrect, as a negative balance of trade refers to a trade deficit, where imports exceed exports. Option B is incorrect, as a net outflow of domestic currency would typically occur in a trade deficit, not a surplus. Option C is incorrect, as a nation importing and exporting the same amount would have a balanced trade, not a surplus.

Which of the Following Statements Is True of Trade Surplus