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Essay Questions
Question 3
A trade surplus occurs when the value of exported goods and services is higher than
imports. This means that there is a disposable incursion of domestic currency from foreign
markets. A trade surplus is significant to some countries since it can create employment and
economic growth, but may also lead to higher prices and interest rates within an economy. A
country's trade balance can also influence the value of its currency in the global markets, as it
allows a country to have control of the majority of its currency through trade. A trade surplus can
also be a source of foreign currency to help a nation's balance of payments. It helps society to
reduce the number of losses since the number of exports will be equal to the number of imports in
the country. A trade surplus is so important to some countries since it allows the state to purchase
the assets of another nation. It can also lower the value of a nation's currency enabling the country
to reinvest in some industries. The most important benefits of having a trade surplus in some states
are that it creates more jobs for the domestic economy.
While some countries see the benefits and advantages of using a trade surplus, some
countries do not use trade surplus because they do not benefit them. A trade surplus can be bad for
the economy of a country because it can lead to le...