Choose the statement as true or false.

When the value of exports exceeds the value of imports, it is known as a trade surplus.

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False

True

answer is A.

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Detailed Solution

The above statement is true.
During the 19th century, British manufacturers flooded the Indian market. Exports of grains and commodities from India to the United Kingdom and other countries also increased. The value of Britain's exports to India was higher than the value of its imports from India. As a result, Britain itself had a trade surplus with India. The UK used this surplus to compensate for its trade deficit. This is how the multilateral accounting system works, and it is possible to balance the deficit of one country with the surplus of another country and the surplus of a third country. India played an important role in helping Britain make up for its deficit.

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