When the value of a country’s export exceeds her imports, there will be a

Step 1: Analyze the question The question asks what results when the value of a country's exports is greater than the value of its imports.

Step 2: The concept

• Balance of trade is the difference between the value of a country's exports and imports of goods (visible items).
• If exports > imports, the balance of trade is favourable (a trade surplus).
• If imports > exports, the balance of trade is unfavourable (a trade deficit).
• The current account is wider. It includes visible trade, invisible trade (services), income and transfers. A current account surplus needs the total of all these to be positive, not just exports versus imports.

Step 3: Check the options

• A. Deficit current account: Wrong. Exports exceeding imports points to a surplus, not a deficit.
• B. Excess visible imports only: Wrong. This is the opposite of the situation described.
• C. Favorable balance of trade: Correct. The question compares only exports and imports, which is exactly the definition of a favourable balance of trade.
• D. Favourable capital account: Wrong. The capital account records capital flows and does not depend on the export-import comparison.
• E. Surplus current account: This is tempting, but it is not certain. The current account also includes invisibles and transfers, so a trade surplus can still coincide with a current account deficit. Option C is the most direct and precise answer.

Step 4: Answer Favorable balance of trade**.

Exam tip: Match the wording of the question to the term.

• "Exports vs imports" means balance of trade.
• "Total of all international transactions" means balance of payments.
• "Exports > imports" means favourable/surplus.
• "Imports > exports" means unfavourable/deficit.