Question

Suppose, the Balance of Trade of an imaginary economy shows a favorable balance of ₹ 500 crore. The values of merchandise exports are ₹ 1200 crore and transfer payments are ₹ 400 crore. The value of merchandise imports would be ₹ ______ . 
 

• A. 1700
• B. 1500
• C. 700
• D. 900

Hint:

For Balance of Trade, always subtract imports from exports to calculate the trade balance or vice versa.

Answer 1

The Correct Option is C

Balance of Trade (BOT) is calculated as: \[ \text{Exports} - \text{Imports} = \text{Balance of Trade} \] Substituting the given values: \[ 1200 - \text{Imports} = 500 \] \[ \text{Imports} = 1200 - 500 = 700 \]