Based on the same information, you expect Australia's trade balance to be ______ in 1990.

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Carefully compare the given prompt to the answer options provided.
Option 1: 'negative' — This aligns with the expectation that Australia runs a trade deficit in 1990 based on the supplied information. A negative trade balance means imports exceed exports, which would be consistent with a scenario of either subdued export growth, strong import demand, or structural factors affecting Australia’s external accounts.
Option 2: 'approximately zero' — A near-zero trade balance would imply exports and imports are nearly equal. If the provided information emphasized imbalances, deficits, or surpluses, this option would contradict that framing. In many macro scenarios, especially if extrapolating from a pre-existing trend, a balance near zero is less likely unless specific balancing mechanisms are noted.
Option 3: 'positive' — A positive trade balance indicates an export surplus or trade surplus. If the context suggests that Australia faced higher import volumes relative to exports, or if the youth of a downturn in commodity prices or demand, a surplus would be inconsistent with the given expectation. This would be the opposite of a deficit interpretation unless stated otherwise.
In summary, evaluating the context of the information provided, deficits are often anticipated when external conditions or domestic demand patterns lead to higher imports than exports, making a negative trade balance the predicted outcome. The 'approximately zero' option would require a precise balance that isn’t suggested by typical trends, and the 'positive' option would contradict a deficit expectation unless explicitly supported by data such as booming exports or price-driven surpluses.

FA25 ECON 302 002 Final Exam

Based on the same information, you expect Australia's trade balance to be ______ in 1990.

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