If the exports of a country exceed its imports, the country is said to have a favourable balance of trade, or a trade surplus. Conversely, if the imports exceed exports, an unfavourable balance of trade, or a trade deficit, exists.
This balance explains how the country is positioned in terms of commercial relationships with other nations. If the balance is positive, it means the county exports more than what it imports and if it is a negative one, is the other way around. A favorable balance of trade is, nevertheless, not always a positive thing.
If the value of exports is more than the value of imports it is called favourable balance of trade. 1. If the value of imports is greater than the value of exports it is known as unfavourable balance of trade.
Key Takeaways A country with a high demand for its goods tends to export more than it imports, increasing demand for its currency. A country that imports more than it exports will have less demand for its currency.
A favorable balance of trade: occurs when the value of a country's exports exceeds that of its imports. Trade deficit. An unfavorable balance of trade: occurs when the value of a country's imports exceeds that of its exports.
If the prices of a country's exports rise relative to the prices of its imports, one says that its terms of trade have moved in a favourable direction, because, in effect, it now receives more imports for each unit of goods exported.
having desirable or positive qualities especially those suitable for a thing specified. Antonyms: unfavorable, unfavourable. not encouraging or approving or pleasing. negative. expressing or consisting of a negation or refusal or denial.
Favourable balance is the excess of total of debit side over total of credit side of a bank column of a cash book. It is also known as debit balance as per the cash book. In other words, favourable balance means excess of deposits over withdrawals.
The trade balance is the difference between the value of the goods that a country (or another geographic or economic area such as the European Union (EU) or the euro area) exports and the value of the goods that it imports.
The favourable balance of trade indicates the exports are greater than imports and it is known as trade surplus. The trade surplus has a positive impact on the development of the country and the positive impacts are: It increases the revenue of the economy as a whole because exports are revenue for the country.
A country's balance of trade is defined by its net exports (exports minus imports) and is thus influenced by all the factors that affect international trade. These include factor endowments and productivity, trade policy, exchange rates, foreign currency reserves, inflation, and demand.
Explanation: If the value of export is more than value of import is is termed as favourable balance of trade. It is one of the types of balance of trade. A country having favourable balance of trade is a growing nation and is managing the trade very well.