Balance of trade definition
Balance of trade
The balance of trade sometimes referred to as the trade balance, is the difference between the value of a country’s exports and the value of a country’s imports over a set period.
Countries that import more goods and services than they export (in terms of value) have trade deficits, and countries that export more goods and services than imports have trade surpluses.
What is the balance of payments?
A country’s balance of payments is the difference between all money flowing into the country and the outflow to the rest of the world measured during a set period, usually a quarter.
The balance of payments is calculated by comparing all of the financial transactions made on individual, business, and government levels; outbound payments are subtracted from inbound payments to establish a net total.