We read your photo as:
The trade imbalance existing between Papua New and Australia results from
ScanSolve AI Answer
Answer
Step-by-step solution
3 stepsUnderstand what a trade imbalance is.
A trade imbalance occurs when the value of a country's exports to another country is not equal to the value of its imports from that country. This means one country is selling more to the other than it is buying, or vice versa.
Analyze each option in relation to causing a trade imbalance.
- A: Australia exporting most of the products to PNG. If Australia exports a significantly higher value of products to Papua New Guinea (PNG) than it imports from PNG, then Australia would have a trade surplus and PNG would have a trade deficit. This directly results in a trade imbalance.
- B: Australia being PNG's largest trading partner in the Pacific region. Being the largest trading partner indicates the volume or importance of trade, but it does not inherently mean there is an imbalance. Trade can be balanced even with a large trading partner.
- C: PNG exporting more and importing less from Australia. This would also result in a trade imbalance, specifically one where PNG has a trade surplus with Australia. However, it describes the opposite scenario to option A.
- D: Tourism increasing significantly between PNG and Australia. While tourism contributes to the balance of payments (trade in services), "increasing significantly" does not specify the direction of the imbalance (e.g., whether more Australians visit PNG or vice versa, or if the value of tourism services is imbalanced). It's a less direct and less specific cause of a general "trade imbalance" compared to the flow of goods.
Determine the most appropriate answer.
Both options A and C describe situations that would lead to a trade imbalance. However, option A, "Australia exporting most of the products to PNG," directly describes a scenario where Australia's exports dominate the trade relationship, leading to a trade surplus for Australia and a deficit for PNG. This is a common characteristic of trade between a larger, more developed economy (Australia) and a smaller, developing economy (PNG). Without further context from a passage, option A provides a direct and plausible cause for a trade imbalance where one country is the dominant exporter.
The final answer is
Try one yourself
A new problem that tests the same skill.
Still stuck on this one?
Ask a follow-up, and the answer starts from this question.
More Economics Questions

Handwritten Step-by-Step Solution
Get this as a handwritten image on WhatsApp — like a tutor wrote it for you.
Try on WhatsApp