A balance of payments surplus occurs when exports are greater than imports.

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Multiple Choice

A balance of payments surplus occurs when exports are greater than imports.

Explanation:
The balance of payments shows all payments between a country and the rest of the world, and a surplus means more money is coming in than going out. When a country exports more than it imports, foreigners pay for those extra goods and services, so the inflows (credits) from exports exceed the outflows (debits) from imports. That net positive result is what creates a balance of payments surplus. For example, exports of 120 and imports of 100 yield a surplus of 20. If imports were higher, or if they were equal, you’d have a deficit or a balanced position, respectively.

The balance of payments shows all payments between a country and the rest of the world, and a surplus means more money is coming in than going out. When a country exports more than it imports, foreigners pay for those extra goods and services, so the inflows (credits) from exports exceed the outflows (debits) from imports. That net positive result is what creates a balance of payments surplus. For example, exports of 120 and imports of 100 yield a surplus of 20. If imports were higher, or if they were equal, you’d have a deficit or a balanced position, respectively.

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