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A country’s balance of trade is unfavourable when —
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- exports exceed imports
- imports exceed exports
- terms of trade become unfavourable
- None of these
Correct Option: B
The balance of trade, or net exports is the difference between the monetary value of exports and imports of output in an economy over a certain period. It is the relationship between a nation’s imports and exports. A positive balance is known as a trade surplus if it consists of exporting more than is imported; a negative balance is referred to as a trade deficit or, informally, a trade gap.