Q. 175.0( 2 Votes )

Why is favourable Balance of Trade desired for an economy?

Answer :

The difference between export and import gives the balance of trade of a country. If the export quantity exceeds the import quantity, then the trade balance is said to be favourable, and if the import quantity exceeds the export quantity, then it is unfavourable trade balance. Favourable trade balance in a country is desired for an economy as it increases the economic growth rate of the country. More export leads to more incoming of foreign exchange which helps in filling the deficit in the longer run.


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