Just wondering if someone can help. In the 5th Oct 2011 paper in Q36 you are given the following information: 1) Exports of goods £200m 2) Imports of goods -£250m 3) Exports of services £100m 4) Imports of services -£150 and you are asked to calculate the ‘value of the balance of trade’. To me this question is not very clear as you can have a balance of trade in goods, balance of trade in services and a balance of trade in goods & services. Am I correct in thinking that it could actually be all 3? I calculated it for goods & services but the solution was just goods. Thanks
According to the textbook, the balance of trade is defined as total net exports of goods and services, so the answer to this question is a deficit of £100m. However, you're right that sometimes balance of trade could be taken to mean just total net exports of goods, and in this instance, the examiners did actually accept the answer being a deficit of £50m too. I don't think we'd usually take the term "balance of trade" to refer to just services.
