Which of the Following Best Defines Balance of Trade

question 147

Multiple Choice

Which of the following best defines balance of trade?

• A) purchasing products in other countries and bringing them into one's own country
• B) the total value of a nation's exports minus the total value of its imports over some period of time
• C) the total flow of money into the country minus the total flow of money out of the country over some period of time
• D) the ability to specialize in the production of a specific product and trade it for other needed products
• E) the ability to produce a certain product more efficiently than any other nation

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Definitions:

Import Quota

A legal limit on the quantity of a good that can be imported.

Nontariff Barrier

Any form of restrictive regulation or procedure other than tariffs that countries use to control the amount of trade across their borders, including quotas, embargoes, sanctions, and levies.

Export Quota

A government-imposed limit on the quantity of a specific good that can be exported over a given period, used to control trade balances.

Domestic Consumption

This term refers to the total amount of goods and services consumed within a country's borders, indicating the level of domestic demand.