Difficulty: Hard

Average Score: 25%

If a country has a trade surplus of $60 billion, what can be concluded about its export and import values

Rationale

The country's exports are $200 billion, and its imports are $140 billion.

A trade surplus occurs when a country's exports exceed its imports. In this case, a surplus of $60 billion indicates that the difference between exports and imports is $60 billion, leading to the conclusion that the exports amount to $200 billion and the imports to $140 billion.

A (The country's exports are $200 billion, and its imports are $260 billion.) YOUR ANSWER

This option suggests that exports are greater than imports by $60 billion; however, it incorrectly states that imports exceed exports. If exports were $200 billion and imports were $260 billion, the country would actually have a trade deficit of $60 billion, not a surplus.

B (The country's exports are $120 billion, and its imports are $180 billion.) YOUR ANSWER

In this scenario, if exports are $120 billion and imports are $180 billion, the country would again experience a trade deficit of $60 billion. This does not align with the condition of having a trade surplus, which requires exports to exceed imports.

C (The country's exports are $200 billion, and its imports are $140 billion.) CORRECT

This choice correctly reflects the condition of a trade surplus. A surplus of $60 billion is calculated as $200 billion (exports) - $140 billion (imports), confirming that exports significantly exceed imports.

D (The country's exports are $110 billion, and its imports are $70 billion.) YOUR ANSWER

This option presents a scenario where exports are greater than imports, but it results in a surplus of only $40 billion, not the required $60 billion. Therefore, it does not satisfy the condition of a trade surplus of $60 billion.

Conclusion

A trade surplus indicates that the value of exports surpasses that of imports. The only option that accurately represents a surplus of $60 billion is that the country’s exports are $200 billion and imports are $140 billion. Other choices either result in a trade deficit or do not meet the surplus requirement, reinforcing the importance of correct calculation in evaluating trade balances.

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