Balance Of Trade

To allow for each country to have an equal footing in the international market, it is generally advised that the import amount is equal to its export amount. Balance Of Trade: Difference of exports and imports.$|Exports-Imports|$ Trade Surplus: When $Exports>Imports$ Trade Deficit: When $Imports>Exports$

Balance of Payments

A better way to understand a country’s international transactions. A country’s prosperity is based off capital transactions with other countries. Capital transactions include:

• Credit transactions (borrowing/lending)
• Debit transactions (goods/services)