In 2010, a small country imported goods worth $500 billion and exported goods worth $443 billion. It exported services worth $248 billion and imported services worth $330 billion. Payments on investments abroad totaled $199 billion, while returns paid on foreign investments were $125 billion. Unilateral transfers from the country to other nations amounted to $94 billion. What was the country’s merchandise trade deficit for 2010?

A. $154 billion
B. $70 billion
C.$57 billion
D.$65 billion

ANSWER:

C.$57 billion

Trade deficit is the difference between the value of exports less the value of imports of goods.

Trade deficit = 443 – 500 = -$57.

Negative sign implies there is a trade deficit.

ANSWER: $57,000,000,000