A country with a ________ has a favorable balance of payments.Multiple Choicebudget deficittrade surpluslow gross domestic product (GDP)high import rate

1. Break Down the Problem

We need to identify which of the options results in a favorable balance of payments for a country. The balance of payments is a financial statement that summarizes a country's transactions with the rest of the world.

2. Relevant Concepts

• Balance of Payments: A favorable balance of payments indicates that the value of the country's exports exceeds the value of its imports.
• Trade Surplus: This occurs when a country's exports are greater than its imports.
• Budget Deficit: This is when expenditures exceed revenues, which does not directly indicate a favorable balance.
• Gross Domestic Product (GDP): While related to economic health, this does not inherently indicate a favorable balance of payments.
• Import Rate: A high import rate typically suggests more imports than exports, leading to a trade deficit.

3. Analysis and Detail

• Budget Deficit: While it impacts overall financial health, a budget deficit alone does not determine the balance of payments.
• Trade Surplus: A trade surplus directly correlates with a favorable balance of payments because more money is coming into the country through exports than is going out through imports.
• Low GDP and High Import Rate: Both options suggest a weakened economic position and are likely to result in a balance of payments deficit.

4. Verify and Summarize

Only the trade surplus option supports a favorable balance of payments. The remaining options do not impact positively and often lead to adverse conditions.

Final Answer

A country with a trade surplus has a favorable balance of payments.