Q7 of 16 Page 9

Why is it detrimental for a nation to have a negative balance of payments?

Negative balance of payments means that for a nation, the value of import is much more than the value of export i.e. the country spends much more on buying imported products from other countries than selling its own products to the other countries. This leads to a loss of economy and expenditure of the economic reserves, which is really detrimental for a nation.


More from this chapter

All 16 →