If a country has a trade deficit of $300 million and it imports goods worth $1.5

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Question: If a country has a trade deficit of $300 million and it imports goods worth $1.5 billion, what is the value of its exports?

Options:

Correct Answer: $1.2 billion

Solution:

Exports = Imports - Trade Deficit = $1.5 billion - $300 million = $1.2 billion.

If a country has a trade deficit of $300 million and it imports goods worth $1.5 billion, what is the value of its exports?

If a country has a trade deficit of $300 million and it imports goods worth $1.5 billion, what is the value of its exports?

Step 1: Understand what a trade deficit is. A trade deficit means that a country imports more goods than it exports.
Step 2: Identify the values given in the question. The trade deficit is $300 million and the imports are $1.5 billion.
Step 3: Convert the trade deficit into the same unit as imports. $300 million is the same as $0.3 billion.
Step 4: Use the formula to find exports. The formula is: Exports = Imports - Trade Deficit.
Step 5: Substitute the values into the formula: Exports = $1.5 billion - $0.3 billion.
Step 6: Perform the subtraction: $1.5 billion - $0.3 billion = $1.2 billion.
Step 7: Conclude that the value of exports is $1.2 billion.

Trade Balance – The relationship between a country's exports and imports, where a trade deficit indicates that imports exceed exports.
Calculating Exports – Understanding how to derive the value of exports from known imports and trade deficit.