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Explain five circumstances under which a country may realize surplus in its balance of payments.

Explain five circumstances under which a country may realize surplus in its balance of payments.

Answers

Mutiso
When the country exports highly valued finished products - The demand for such products is high and they fetch higher prices in the international market.
When the country mainly imports lowly valued primary goods - These cheap imports are converted into finished goods hence earning pro?ts from international trade.
When the country aggressively promotes its exports - This will create more market for exporting goods thus increasing the country’s earnings.
When the country devalues its currency - This makes imports more expensive forcing local consumers to by locally produced goods while exports become cheaper and are sold in large volumes.
When the country enjoys favourable economic order - The country may be able to influence the World market prices to favour its exports
When the country diversifies its exports - The country increases the range of its exports hence becoming more competitive
When the country has access to adequate capital and technology - This makes the country to have a highly developed manufacturing and processing sector.
Mutiso answered the question on January 16, 2019 at 19:01

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