Answer: greater than its imports.

Using a fundamental identity from macroeconomics, the relationship between the trade balance and expenditure-saving decisions can be expressed as: $$X - M = (S - I) + (T - G)$$ Where: - **X** represents exports, - **M** represents imports, - **S** is private savings, - **I** is investment in plant and equipment, - **T** is taxes net of transfers, - **G** is government expenditure. From this relationship, a trade surplus (X > M) must be reflected in either a fiscal surplus (T > G), an excess of private saving over investment (S > I), or both. Therefore, when a country has a fiscal surplus (T > G) and an excess of private saving over investment (S > I), its exports are greater than its imports (X > M).

Author: LeetQuiz Editorial Team