How would an increase in its exports affect the balance of payments of a developing country?[4 marks]

1.How would an increase in its exports affect the balance of payments of a developing country?
                                                             [4 marks]
Balance of payment is a financial statement which shows a country’s imports and exports transactions with the rest of the world. Increase in exports of goods and services improve the current account of balance of payment. It makes a favorable current account balance. Secondly increase in exports increases the inflow of foreign currency into the country which means the total balance of payment will be in a surplus position. In other words the country’s’ economic position will be improved.