Romernia, an Asian country, imported goods and services worth $700 million in the last fiscal year. It exported goods worth $400 million in the same year. The difference in the value of Romernia's imports and exports is known as _____.

Question

Quizplus · Accepted Answer

The difference in the value of imports and exports is known as the balance of trade. The other options refer to different concepts: 
- Absolute advantage is the ability of a country to produce a good or service more efficiently than another country. 
- Comparative advantage is the ability of a country to produce a good or service at a lower opportunity cost than another country. 
- Balance of payments measures all the economic transactions between a country and the rest of the world, including trade in goods and services, financial flows, and transfers.

Romernia, an Asian Country, Imported Goods and Services Worth $700