Q.28. Define Balance of Trade
BALANCE OF
TRADE
Balance of trade refers to the
difference in the value of imports and exports of commodities only i.e. visible
items only. Movements of goods between countries is known as visible trade
because the movement is open and can be verified by the custom officials with
respect to balance of trade the following terminologies are important.
Balanced
Balance of Trade
If during a given years exports and
imports of the country are equal the balance of trade is said to be Balanced.
Favourable
Balance of Trade
If the value of exports exceeds the
value of imports the country is said to experience an export surplus or
favourable balance of trade.
Un-Favourable
Balance of Trade
If the value of imports exceeds the
value of its exports the country is said to have a deficit or an adverse
balance of trade.
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