Choose the given statement is true/false:
A favourable balance of trade involves higher imports than exports.

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True

False

answer is B.

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Detailed Solution

The above statement is false.
A country is considered to have a favourable trade balance or a trade surplus if its exports surpass its imports. Conversely, a negative trade balance, or trade deficit, develops if imports outpace exports. The mercantilist economic theory, which predominated in Europe from the 16th to the 18th century, claimed that maintaining a favourable trade balance was essential to funding a nation's import of commodities and sustaining its export industry.
The correct statement is “A favourable balance of trade involves higher exports than imports”.

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