Distinguish between Favourable balance and Unfavourable balance of trade.

Favourable Balance of Trade

Unfavourable Balance of Trade

1. When there is an excess of exports over imports, it is called favourable balance of trade.

2. In 1976-77 in India the imports were of value of 5073 crore rupees while exports were of value of 5142 crore rupees. Balance of trade was + 69 crore rupees.

3. It helps to strengthen the economy of a country.

1. When there is excess of imports over exports, it is called an unfavourable balance of trade.

2. In India in 1982-83 imports were of value 14047 crore rupees while exports were of value of 8637 crore rupees. Balance of trade was - 5410 crore rupees.

3. It creates problems for the economy of a country.