Would One Expect the Imports and Exports Between Two Countries

question 79

Multiple Choice

Would one expect the imports and exports between two countries to be approximately equal?

• A)Yes;the foreign exchange rate assures that this will be the case.
• B)Yes;this will always be the case unless one of the countries is treating the other unfairly.
• C)No;there is no reason to expect that the purchases from and sales to any specific country will be equal because one country may not want to buy the items the other country produces at a low opportunity cost.
• D)No;if they were approximately equal this would mean that neither country benefited from the trade.

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Definitions:

Invested

The act of allocating resources, typically money, into something with the expectation of generating income or profit, such as stocks, bonds, real estate, or a business venture.

Balance of Trade Surplus

A situation where the value of a country's exports exceeds the value of its imports over a given period, indicating a positive balance of trade.

Exports

Goods or services produced in one country and sold to buyers in another, contributing to the selling country's national income.

Imports

Goods or services brought into one country from another for sale or use.