What is a trade surplus?

A trade surplus occurs when the value of a country's exports exceeds the value of its imports. This represents a positive balance of trade and indicates that a country is selling more goods and services to other countries than it is buying from them. A trade surplus can be a sign of a competitive economy, where domestic industries are thriving and able to produce more for foreign markets.

The other choices do not accurately depict a trade surplus. For example, the first option describes a trade deficit, where imports surpass exports. The second choice indicates a balanced trade situation; neither exports nor imports dominate. Lastly, the fourth option suggests a scenario of loss, which does not accurately reflect the nature of a trade surplus, as it concerns the net gains from international trade rather than losses. Understanding these distinctions is crucial for grasping international trade dynamics.