Question

distinguish between balance of trade and balance of payment ​

Answer 1

BASIS FOR COMPARISON BALANCE OF TRADE BALANCE OF PAYMENT

Meaning Balance of Trade is a statement that captures the country's export and import of goods with the remaining world. Balance of Payment is a statement that keeps track of all economic transactions done by the country with the remaining world.

Records Transactions related to goods only. Transactions related to both goods and services are recorded.

Capital Transfers Are not included in the Balance of Trade. Are included in Balance of Payment.

Which is better? It gives a partial view of the country's economic status. It gives a clear view of the economic position of the country.

Result It can be Favorable, Unfavorable or balanced. Both the receipts and payment sides tallies.

Component It is a component of Current Account of Balance of Payment. Current Account and Capital Account.