Suppose the Balance of Trade of a nation exhibits a surplus of 20,000 crores. The import of merchandise of nation is half of exports of merchandise to rest of world. The value of exports will be
Answer & explanation
Correct answer: option 2
The correct answer from the options (2) : 40,000 crores
Let's denote the value of exports as E and the value of imports as M. According to the Informat. The balance of trade surplus is 20,000 crores. This means $E-M=20,000.$
The import of merchandise is half of the exports of merchandise. Therefore,
M=0.5E.
Substitute M from the second equation into the first equation:
$E-0.5E=20,000$
$0.5E=20,000$
$E=40,000$
Hence, the value of exports is 40,000 crores Thus, the correct answer is 40,000 crores, as given in option (2).