balance of trade
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Balance of trade
flow of goods (exports minus imports) between two countries.
Balance of Trade
The difference between the value
of a country's exports
and the value of its imports
. If the value of exports exceeds that of imports, a country is said to have a trade surplus
, while the opposite case is called a trade deficit
. Analysts disagree on the impact, if any, of the balance of trade on the economy
. Some economists
believe that an overly large trade deficit causes unemployment and lowers GDP growth
. Others believe that the balance of trade has little impact, because the more international trade occurs, the more likely it is that foreign companies will invest
in the home country, negating any negative effects.
balance of trade
A net figure calculated by subtracting a country's imports from its exports during a specific period. If a country sells more goods and services than it purchases, its balance of trade is said to be positive, that is, exports exceed imports. Such a balance is generally considered to be favorable. Conversely, a negative balance is said to be unfavorable. A country's balance-of-trade position has great impact on its economic activity and on the profits of companies operating within it. See also trade deficit
, trade surplus
Balance of trade.
The difference between the value of a country's imports and exports during a specific period of time is called the balance of trade.
If a country exports more than it imports, it has a surplus, or favorable balance of trade. A trade deficit, or unfavorable balance, occurs when a country imports more than it exports.
balance of trade a statement of a country's trade in GOODS (visibles) with the rest of the world over a particular period of time. The term ‘balance of trade’ specifically excludes trade in services (invisibles) and concentrates on the foreign currency earnings and payments associated with trade in finished manufactures, intermediate products and raw materials, which can be seen and recorded by a country's customs authorities as they cross national boundaries. See BALANCE OF PAYMENTS.