When a country has a favorable balances of trade?

Balance of trade, or net exports as it is sometimes called, is the difference between the monetary value of exports and imports of an economy over a certain period of time. In other Words, it denotes the relationship between a country's imports and exports. This may be positive or negative.

A positive trade balance is known as a trade surplus and this happens when exports are more than imports. On the other hand, a negative trade balance is called as a trade deficit or a trade gap and results when the imports are more than . The balance of trade is sometimes divided into a goods and a services balance.

A country attains favourable balance of trade, when its value of exports produced by that country and purchased by a foreign country is more than its imports. This is because it results in a net inflow of monetary payments into the country from the foreign sector. It is called favourable becasue it is beneficial to a country.

M.J. SUBRAMANYAM, MUMBAI