Unit 1 Ch 3 : The Making of a Global World — Social Studies STD 10 — Question

Multilateral settlement system refers to an unique economic system by which one country's deficit with another country is balanced by its surplus with a third country. For example,in the 19th century, Britain had a 'trade surplus' in India as the value of British exports to India was much higher than the value of British imports from India.This trade surplus with India helped to balance Britain's trade deficits with other countries from which it was importing more compared to exporting and that too at a higher price.