Question

what is trade balance what are its two components explain

Answer 1

The trade balance, also known as thebalance of trade (BOT), is the calculation of a country's exports minus its imports

Answer 2

Trade balance for balance of trade it is the term used for calculating the difference between the exports and imports of a country.

It is defined as exports minus the imports of a country.

The balance of trade in a country is calculated during the deficit time I'm and when the exports are equal to the imports of a country then that period is said to be of of balance of trade.

Components of balance of trade are:

●Export of goods : as the goods which are exported contribute in the the economy of the country, thus these goods play an important role in the balance of trade as it is is based on the export and import only.

●Import of goods : Import of goods is the another important component of balance of trade because apart from export the goods which are being imported into the country we also are a part of the trade policy of the country.

The balance of trade only includes the visible goods either exported or imported and does not include the services.