Question

If you observed a country with a rapidly growing

trade surplus over a period of a year or so, would you be more likely to believe that the country's economy was in a period of recession or of rapid growth? Explain.

Short answer

It may be more due to the recession.

Step-by-step solution

Step 1. Definition

A trade surplus is defined as an economic measure of a constructive/positive balance of trade when a country's exports are more than its imports.

Step 2. 

When a country has a large trade surplus it may be more likely due to recession in the economy.in recession, a country experiences low GDP and a high rate of unemployment also consumption is very low and exports exceed imports due to domestic fall in price.

That fall in price due to recession attract purchase from other countries and leads to increase in exports and trade balance is in positive.