Labeling Lines Using Trade Balance Formula

Steps:

• Trade balance = exports - imports; positive balance means exports exceed imports.
• Identify line 1 as the lowest values over 2011-2019: represents imports.
• Identify line 2 as higher values: represents exports.
• Identify line 3 as the positive difference between lines 2 and 1: represents trade balance.

Why B is correct:

• Assigns imports to the lowest line, exports to the middle, and trade balance (exports - imports) to the surplus line, matching the formula.

Why the others are wrong:

• A: Swaps exports and imports, contradicting relative magnitudes.
• C: Places trade balance between imports and exports, ignoring it as a derived difference.
• D: Identical to C, incorrectly positioning trade balance.

Final answer: B