Q. With reference to international trade, consider the following statements:
Statement I: The trade balance refers to the monetary difference between the total exports and imports of an economy in a financial year, and it can be either favourable or unfavourable.
Statement II: Trade policy, also known as foreign trade or Exim policy, regulates a country’s export-import activities and is periodically revised based on global economic conditions and the policies of trading partners.
Which of the statements given above is/are correct?
Answer: C
Notes:
Explanation:
- Trade balance is the difference between exports and imports in monetary terms. A positive balance is favourable (surplus), while a negative balance is unfavourable (deficit).
- Trade policy governs the export-import framework and is updated to reflect changes in global trade dynamics and the policies of key trade partners.
Source: Indian Economy (Ramesh Singh)
