Balance of Trade Calculation

Steps:

• Sum exports of goods and services to get total exports ($20 million).
• Sum imports of goods and services to get total imports ($13 million).
• Subtract imports from exports: $20M -$13M = $7M.
• Positive difference indicates a surplus of $7 million.

Why C is correct:

• Balance of trade formula (BOT = Exports - Imports) yields +$7 million, defining a surplus when exports exceed imports.

Why the others are wrong:

• A: Assumes imports exceed exports by $7 million, reversing the calculation.
• B: Assumes imports exceed exports by $3 million, understating the surplus.
• D: Assumes a larger surplus of $13 million, likely from adding instead of subtracting.

Final answer: C