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Export and import are the components of trade.

The balance of trade of a country is the addition of its export and import.

When the value of exports exceeds the value of imports, it is called a favourable balance of trade.

On the contrary, if the value of imports exceeds the value of exports, it is an unfavourable balance of trade.

answer is B.

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Detailed Solution

The incorrect answer is that the balance of trade of a country is the addition of its export and import.
The difference between a country's export and import over a specific period is its balance of trade. This excludes the import and export of services. A favourable balance of trade exists when the value of exports exceeds the value of imports. On the other hand, an unfavourable trade balance exists when the value of imports is higher than the value of exports.

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