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WAEC Economics 2008 Question 49

Question 49

Balance of Payments and Exchange Rates

Balance of payment surplus implies that the value of the country's

  1. A.exports exceeds its imports
  2. B.imports exceeds its exports
  3. C.exports is equal to its imports
  4. D.terms of trade is constant.
Show the answer and explanation

Answer: A (exports exceeds its imports)

Explanation

A surplus means receipts from exports and other inflows are greater than payments for imports.