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Calculate the Balance of Trade, using the following information - Leaving Cert Business - Question 9 - 2014

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Question 9

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Calculate the Balance of Trade, using the following information. (Show your workings) Visible Imports €1500m Visible Exports €1300m Balance of Trade: (ii) Tick (✓... show full transcript

Worked Solution & Example Answer:Calculate the Balance of Trade, using the following information - Leaving Cert Business - Question 9 - 2014

Step 1

Calculate the Balance of Trade:

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Answer

To calculate the Balance of Trade, use the formula:

extBalanceofTrade=extVisibleExports−extVisibleImports ext{Balance of Trade} = ext{Visible Exports} - ext{Visible Imports}

Substituting the given values:

extBalanceofTrade=€1300m−€1500m ext{Balance of Trade} = €1300m - €1500m

Calculating this gives:

extBalanceofTrade=−€200m ext{Balance of Trade} = -€200m

This negative value indicates that the country has a trade deficit.

Step 2

Tick (✓) the correct box to state if the Balance of Trade is a surplus or a deficit:

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Answer

Given that the Balance of Trade is -€200m, we conclude that:

  • The Balance of Trade is a Deficit.

[✓] Deficit [ ] Surplus

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