WAEC Economics 2015 Theory — Question 15

Model answer

(i) Favourable balance of payment (surplus balance of payment): this is a situation where the total receipts/payments for foreign goods received by a country are greater than the total payments made for imports - i.e. total payments for foreign goods are less than the total receipts from exports. (ii) Unfavourable balance of payment (deficit balance of payment): this is a situation where the total payments for foreign products are greater than the total receipts from exportation.