Knock out the false trade balance claims

Exercise and reference answers

Questions

1. Question

   Three of these statements about trade balances are false.

   Choices

   1. Item

      A trade deficit means imports top exports

      Correct

      Yes

   2. Explanation

      Exporting more than a country imports is a favorable balance, a trade surplus.

      Item

      A trade surplus is an unfavorable balance

   3. Explanation

      It also covers loans, gifts, aid, military spending abroad and transfers.

      Item

      The balance of payments covers goods only

   4. Explanation

      Foreign aid belongs to the wider balance of payments, not the trade balance.

      Item

      Foreign aid sits in the balance of trade

Instructions

Tap the three false statements about trade balances to clear them from the board.

Explanation