ExpertEasy1 markMultiple Choice
AQA GCSE · Question 03 · How the economy works
A balance of trade deficit is best described as which of the following?
A balance of trade deficit is best described as which of the following?
Answer options:
A.
Value of exports is higher than the value of imports
B.
Value of government spending is higher than the value of revenue from taxation
C.
Value of imports is higher than the value of exports
D.
Value of revenue from taxation is higher than the value of government spending
How to approach this question
Recall the definition of a balance of trade deficit. It relates to the values of imports and exports. A deficit means more is going out (in payments for imports) than coming in (from receipts for exports).
Full Answer
C.Value of imports is higher than the value of exports✓ Correct
The correct answer is C. A trade deficit occurs when a country's imports exceed its exports.
The balance of trade measures the difference between the value of a country's exports and the value of its imports. A deficit occurs when the value of imports is greater than the value of exports (Imports > Exports). A surplus is when Exports > Imports. Options B and D relate to the government's budget balance, not the balance of trade.
Common mistakes
Mixing up trade deficit with budget deficit. Trade relates to imports and exports, while budget relates to government spending and tax revenue.
Practice the full AQA GCSE Economics Paper 2
29 questions · hints · full answers · grading
More questions from this exam
Q01Fiscal policy would involve changes in which of the following?EasyQ02Which of the following is an indirect tax?EasyQ04Which of the following best describes the type of unemployment caused by interest rates and tax r...EasyQ05Table 1 shows economic growth between 2017 and 2021.
**Table 1**
| Economic growth | % change in...EasyQ06Which pair of policies is most likely to increase income inequality?Medium