Choose that given statement is true/false:

Trade surplus refers to a situation when the value of exports is higher than the value of imports.

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True

False

answer is A.

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Detailed Solution

The above statement is true.
Trade surplus refers to a situation when the value of exports is higher than the value of imports. For example, fine cotton produced in India was exported to Europe. With industrialisation, British cotton manufacturing began to expand, and industrialists pressured the government to restrict cotton imports and protect local industries. Over the nineteenth century, British manufacturers flooded the Indian market. But the value of British exports to India was much higher than that of British imports from India. Thus Britain had a ‘trade surplus with India. Britain used this surplus to balance its trade deficits.

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