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 . ... The balance of trade is also referred to as the trade balance, the international trade balance, commercial balance, or the net exports.
Which country has a balanced balance of trade?
| Rank Economy CAB (million US dollars) | 1 China 296,600 | 2 Germany 195,400 | 3 Japan 164,900 | 5 Netherlands 80,880 |
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How can a country balance its trade?
A country’s balance of trade is defined by its net exports (exports minus imports) and is thus influenced by all the factors that affect international trade. These include factor endowments and productivity, trade policy, exchange rates, foreign currency reserves, inflation, and demand.
What is the trade balance in economics?
The trade balance is the difference between the value of the goods that a country (or another geographic or economic area such as the European Union (EU) or the euro area) exports and the value of the goods that it imports.
What is a country’s trade balance quizlet?
What is Trade Balance? This is the difference between the value of exports and imports to a specific country’s economic output over a set period of time . ... This is known as a trade surplus, when exports exceed imports.
What is an example of balance of trade?
Balance of Trade formula = Country’s Exports – Country’s Imports . For the balance of trade examples, if the USA imported $1.8 trillion in 2016, but exported $1.2 trillion to other countries, then the USA had a trade balance of -$600 billion, or a $600 billion trade deficit.
Is trade surplus good or bad?
A positive trade balance (surplus) is when exports exceed imports. A negative trade balance (deficit) is when exports are less than imports. Use the balance of trade to compare a country’s economy to its trading partners. A trade surplus is harmful only when the government uses protectionism .
What is a positive balance of trade for a country?
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.
Does the balance of trade always balance?
The balance of payments always balances . Goods, services, and resources traded internationally are paid for; thus every movement of products is offset by a balancing movement of money or some other financial asset.
What 5 countries does the US have the highest surplus?
| Rank Country Surplus | 1 Hong Kong 15.4 | 2 Netherlands 11.6 | 3 Brazil 8.5 | 4 Australia 8.3 |
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What is the other name of balance of trade?
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. ... The balance of trade is also referred to as the trade balance, the international trade balance, commercial balance, or the net exports .
What is a good trade balance?
A country’s trade balance is positive (meaning that it registers a surplus) if the value of exports exceeds the value of imports . Conversely, a country’s trade balance is negative, or registers a deficit, if the value of imports exceeds that of exports.
What is the difference between trade balance and current account balance?
The trade balance is the amount a country receives for the export of goods and services minus the amount it pays for its import of goods and services. The current account is the trade balance plus the net amount received for domestically-owned factors of production used abroad.
What is the main benefit of free trade between two countries?
Free trade means that countries can import and export goods without any tariff barriers or other non-tariff barriers to trade. Essentially, free trade enables lower prices for consumers, increased exports, benefits from economies of scale and a greater choice of goods.
What does it mean if a country has a trade deficit?
A trade deficit occurs when the value of a country’s imports exceeds the value of its exports—with imports and exports referring both to goods, or physical products, and services. In simple terms, a trade deficit means a country is buying more goods and services than it is selling .
Which is a positive balance of trade for a country quizlet?
A trade surplus is an economic measure of a positive balance of trade, where a country’s exports exceed its imports.
