Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: Open Economy Macro Economics

Question:

Which of the following items will not be included while calculating "Balance of trade" ?

  • Export of sandals to Pakistan
  • Hospitality services in Japan
  • Import of fridge from China
  • Export of coffee beans to Malaysia
Options:

1 and 3

2 and 4

Only 2

Only 4

Correct Answer:

Only 2

Explanation:

Balance of trade is the difference between the value of exports and imports of visible items only. As, hospitality services is not a visible item thus, will not be included in the calculation of balance of trade.