Economy

Balance of trade

The balance of trade is the tool used to be able to compare the value that exists between a country's goods and services exports and its importations. When exports are greater than imports, what is known as a trade surplus is presented and this situation is seen by most nations as a favorable balance of trade. On the contrary, when the value of imports exceeds the value of exports, then we are talking about a trade deficit. Countries generally consider it to be an unfavorable balance of trade. In order to determine whether a country really has a positive balance of trade, three key questions must be answered:

Balance of trade

Related topics

Balance of payments, economy of scalemacroeconomics

What is balance of trade?

Also known as the net export balance, balance of trade is the difference between the value of money between the exports and imports of a country's economy for a given period, measured in the currency of that economy.

How the balance of trade is calculated

The balance of trade is calculated by calculating the balance of it through calculations to know the difference between exports and imports made by a given country, in other words, the difference between the value of goods that a country can and sells abroad and the value of goods that it buys from other foreign countries.

Types of balance of trade

There are different types of balance of trade, for example:

Positive and negative balance of trade

There are two types of balance of trade depending on the results it gives, and they are:

Examples

Written by Gabriela Briceño V.
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