Q. With reference to the concepts of Trade Balance and Trade Policy, consider the following statements:
1.A positive trade balance indicates that the value of exports exceeds the value of imports in a financial year.
2.Trade policy governs both export and import activities of an economy.
3.Trade policy remains constant over time and is not influenced by global economic trends.
Which of the statements given above are correct?
Quarterly-SFG-Jan-to-March
Red Book

[A] 1 and 2 only

[B] 2 and 3 only

[C] 1 and 3 only

[D] 1, 2 and 3

Answer: A
Notes:

Explanation:

  • A positive trade balance (also called a trade surplus) means exports > imports — favourable for the economy.
  • Trade policy or Exim Policy regulates both exports and imports.
  • Trade policy does change and is influenced by global economic conditions and the policies of trading partners.

Source- TMH Indian Economy by Ramesh Singh

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