C) Exports and imports are interrelated, therefore the trade disbalance cannot be allowed

4. The trade balance refers to:

a) The difference between a country’s merchandise exports and merchandise imports. If exports

exceed imports, then a trade surplus, or “favourable balance of trade,” is being realized.

If imports exceed exports, then a trade deficit, or “unfavourable balance of trade,” is

Occurring.

b) The difference between a country’s merchandise exports and merchandise imports. If exports

exceed imports, then a trade deficit, or “unfavourable balance of trade,” is occurring.

c) The difference between a country’s merchandise exports and merchandise imports. If imports

exceed exports, then a trade surplus, or “favourable balance of trade,” is being realized.

5. By summarizing all the transactions in the current account we will obtain:

A) The balance on current account. It indicates that American import transactions (in our example)

Created a demand for the same quantity of foreign currencies as American export

Transactions supplied.

B) The balance on current account. We will find out whether there was a deficit or active balance.

In the given example the United States realised a current accound deficit.

C) The balance on current account. It indicates that American import transactions created a