ECONOMICS
BALANCE OF PAYMENTS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Difference between import and export of goods
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Difference between import and export of services
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Difference between import and export of capital
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Difference between all exports and all imports
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Detailed explanation-1: -Balance of trade (BOT) is the difference between the value of a country’s exports and the value of a country’s imports for a given period. Balance of trade is the largest component of a country’s balance of payments (BOP).
Detailed explanation-2: -Balance of trade is measured as the difference between import and exports of goods.
Detailed explanation-3: -Net exports are the estimation of the total value of a country’s exports minus the total value of its imports. A positive net exports figure indicates a trade surplus. On the other hand, a negative net exports figure indicates a trade deficit.
Detailed explanation-4: -Balance of Trade : It refers to the total value of country’s export commodities and total value of imports commodities. Thus, balance of trade includes only visible trade, i.e., movement of goods (exports and imports of goods).
Detailed explanation-5: -If the exports of a country exceed its imports, the country is said to have a favourable balance of trade, or a trade surplus. Conversely, if the imports exceed exports, an unfavourable balance of trade, or a trade deficit, exists.