A negative balance of trade would mean that the country:

Both 1 and 3

The correct answer is Option 4: Both 1 and 3

A negative balance of trade, also called a trade deficit, occurs when the value of a country's imports exceeds the value of its exports.

A negative balance would mean that the country spends more on buying goods than it can earn by selling its goods. This would ultimately lead to exhaustion of its financial reserves.