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JAMB Commerce 2011 Question 13

Question 13

Foreign Trade

Balance of payment problems arise if a country's

  1. A.exports is more than imports
  2. B.imports is more than exports
  3. C.currency is devalued
  4. D.invisible exports is more than visible exports.
Show the answer and explanation

Answer: B (imports is more than exports)

Explanation

When a country pays more for imports than it earns from exports, it has a deficit, i.e. a balance of payments problem.