Question

Difference between balance if payent and balance of trade

Answer 1

The balance of payment, also known as balance of international payment, of a country is the record of all economic transactions between the residents of the country and the rest of world in a particular period of time (over a quarter of a year or more commonly over a year). The balance of payments is a summary of all monetary transactions between a country and rest of the world. These transactions are made by individuals, firms and government bodies. Thus the balance of payments includes all external visible and non-visible transactions of a country. It is an important issue to be studied, especially in international financial management field, for a few reasons.
The balance of trade, commercial balance, or net exports  (sometimes symbolized as NX), is the difference between the monetary value of a nation's experts  and import over a certain period. Sometimes a distinction is made between a balance of trade for goods versus one for services. "Balance of trade" can be a misleading term because trade measures a flow of exports and imports over a given period of time, rather than a balance of exports and imports at a given point in time. Also, balance of trade does not mean that exports and imports are "in balance" with each other or anything else.

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