Question

What happens to the balance of payments of south Africa when exports exceed imports?

1. Inflow of foreign exchange
2. Outflow of foreign exchange
3. Balance of payment will be in equilibrium
4. Investment will decrease

Answer 1

Any country that exports more than it imports, has a trade surplus or a positive trade balance.This brings about increased investments and inflow of foreign exchange.

So the correct answer is 1.Inflow of foreign exchange.