Question:

Suppose, the Balance of Trade of an imaginary economy shows a favourable balance of Rs. 500 crore. The values of merchandise exports are Rs. 1200 crore and transfer payments are Rs. 400 crore. 
The value of merchandise imports would be ______ . 
(Choose the correct alternative to fill in the blank)

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In a favourable Balance of Trade, Exports exceed Imports. Use the BOT formula: \( {Exports} - {Imports} = BOT \).
Updated On: Jan 30, 2025
  • 1700
  • 750
  • 700
  • 900
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The Correct Option is C

Solution and Explanation

The formula for Balance of Trade (BOT) is: \[ {BOT} = {Exports} - {Imports} \] Given: \[ {BOT} = Rs. 500 \, {crore}, \, {Exports} = Rs. 1200 \, {crore} \] \[ {Imports} = {Exports} - {BOT} = 1200 - 500 = Rs. 700 \, {crore} \]
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