Explain the terms trade, trade balance, exports, trade surplus and globalization. Also explain a trade deficit using Diagram B.

Here are the answers to your questions:

1.1 Match the meanings with the correct terms in the table below.

• Trade $\rightarrow$ D. Exchange of goods and services
• Trade balance $\rightarrow$ A. Difference between the countries' exports and imports
• Exports $\rightarrow$ B. Goods sold out of the country
• Trade surplus $\rightarrow$ C. When the value of the country's exports is higher than imports
• Globalisation $\rightarrow$ E. The economic, social and technological exchange between countries

1.2 Explain trade in diagram B.
Diagram B illustrates a trade deficit. This occurs when a country's imports (goods and services bought from other countries) are greater in value than its exports (goods and services sold to other countries). The scale shows imports outweighing exports, indicating that the country is spending more on foreign goods than it is earning from selling its own goods abroad.