Suppose, Country X, has more inflation than Country Y. Which of the following is most likely situation to happen in such a case, assuming other factors being constant? (Choose the correct alternative)

Class 12th Economic, Question paper 2023 - Suppose, Country X, has more inflation than Country Y. Which of the following is most likely situation to happen in such a case, assuming other factors being constant? (Choose the correct alternative)

There are the Options for the Question: Suppose, Country X, has more inflation than Country Y. Which of the following is most likely situation to happen in such a case, assuming other factors being constant? (Choose the correct alternative)

(a) A surplus trade balance in Country X (b)
(b) A deficit trade balance for Country X
(c) A rise in exports from Country X to Country Y
(d) A deficit trade balance for Country Y

 

The correct answer is – (b) A deficit trade balance for Country X