Consider the following statements:

1. When exports exceed imports, there is a trade surplus; when imports exceed exports, there is a trade deficit.
2. Encouragement of import substitutions will increase the outflow of money from the country and as a result, it may improve the BoP crisis.
3. The imposition of higher duties on exports will make the exports cheaper and may help in bridging the trade gap.

Which of the following statements is correct?