Trade surplus

Definition

A trade surplus occurs when a country's exports exceed its imports, resulting in a net positive balance in trade. This situation is crucial for economic health, as it can lead to increased national wealth and strengthen the currency. In the context of West African empires, trade surplus played a vital role in their economic systems and facilitated the growth of powerful states through the accumulation of resources.

5 Must Know Facts For Your Next Test

1. West African empires like Ghana, Mali, and Songhai thrived on trade surpluses by exporting gold, salt, and other valuable goods.
2. A trade surplus in these empires allowed for the reinvestment of wealth into infrastructure, military, and cultural advancements.
3. Trade surplus also provided leverage in negotiating with other regions, leading to political power and alliances.
4. The trans-Saharan trade routes were instrumental in establishing and maintaining these surpluses, connecting West Africa with North Africa and beyond.
5. The influx of wealth from trade surpluses contributed to the rise of urban centers and the growth of cities as cultural and economic hubs.

Review Questions

• How did trade surplus contribute to the economic stability of West African empires?
  • Trade surplus was crucial for the economic stability of West African empires by ensuring that their exports consistently exceeded imports. This positive balance enabled these empires to accumulate wealth, which they could reinvest in public works, military endeavors, and cultural projects. The resulting economic power fostered stability within these states, making them attractive partners for trade with neighboring regions.
• Evaluate the impact of trans-Saharan trade routes on the trade surpluses of West African empires.
  • The trans-Saharan trade routes significantly enhanced the trade surpluses of West African empires by providing essential links between West Africa and North Africa. These routes facilitated the movement of valuable goods like gold and salt, allowing these empires to tap into larger markets and generate substantial revenue. As a result, the prosperity from trade surpluses reinforced the power of these empires and attracted further commercial activity.
• Assess how the existence of a trade surplus influenced the political dynamics between West African empires and neighboring regions.
  • The existence of a trade surplus fundamentally shaped political dynamics between West African empires and neighboring regions by providing these empires with economic leverage. This wealth allowed them to assert influence over trade negotiations, secure military alliances, and engage in diplomacy on favorable terms. Moreover, as they became central hubs of commerce, these empires attracted attention from external powers eager to establish relationships or exploit their resources, further complicating regional interactions and power balances.

Related terms

exports: Goods and services produced in one country and sold to another, contributing positively to a country's trade balance.

imports: Goods and services brought into a country from abroad, which can negatively affect a trade balance if they exceed exports.

mercantilism:

An economic theory that emphasizes the importance of accumulating wealth through trade surpluses and government regulation of the economy.