Why is a favorable balance of trade important?

When the exports of a country is greater than its imports, then it is considered as a favorable balance of trade. Favorable balance of trade is important to create a stable and growing economy. It makes the country less dependent on other countries for its survival. This is also the indication that the foreign currency reserve of the country is on the rise. This increases the value of the currency in the country conducting a favorable balance of trade. This is an ideal situation for any country in the world. It also depends on the location of the country and also on the type of people living in it.

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