When the balance of trade is unfavourable which of the following conditions prevails?
Answer Details
When the balance of trade is unfavorable, it means that a country's imports are exceeding its exports. This situation leads to a trade deficit, which means that the country is buying more goods and services from other countries than it is selling to them. As a result, the country is spending more money on imports than it is earning from exports.
The options provided are:
- Exports exceed imports
- Imports exceed exports
- Customs duty is high
- Invisible exports exceed visible imports
- The value of money falls
Based on the definition provided, we can conclude that the correct answer is "Imports exceed exports."