Question 43 (1 point) The balance of trade is defined as OA) the difference betw

Question

Question 43 (1 point) The balance of trade is defined as OA) the difference between the balance of the current account and the balance of the financial account. O B) the difference between the value of the goods a country exports and the value of the goods a country imports. O C) the difference between the balance of the current account and the balance of the capital account. D) the difference between the value of the goods and services a country exports and the value of the goods and services a country imports. Save Question 44 (1 point) How does an increase in a country's exchange rate affect its balance of trade? O A) An increase in the exchange rate reduces imports, raises exports, and increases the balance of trade O B) An increase in the exchange rate raises imports, reduces exports, and increases the balance of trade. O C) An increase in the exchange rate raises imports, reduces exports, and reduces the balance of trade. O D) An increase in the exchange rate reduces imports, raises exports, and reduces the balance of trade. Save 0

Explanation / Answer

43) The difference in the value of goods and services of exports and imports in a country is called balance of trade.

So from the defenition

Option D is the correct statement.

44) If a country exchange rate incrases it means it has more demand in the market of other countries. So the imports will increase when compared to exports.

Thus as we know

Balance of trade = Export value - import value

So if the exchange rate increases than import increases and export decreases which means a negative balance of trade which means reduction

Thus OPtion C is the correct statement

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