Distinguish between Balance of Trade and Balance of Payments?

1.	Distinguish between Balance of Trade and Balance of Payments?
Answer» Balance of Trade: 1. Balance of Trade refers to the total value of a country’s exports of commodities and total value of imports of commodities. 2. Only export and import of commodities are included in the statement of Balance of Trade of a country. 3. The Balance of Trade between the values of goods exchanged between two countries. 4. Balance of Trade is a merchandise items or visible items only. Balance of Payments: 1. Balance of payments is a systematic record of a country’s economic and financial transactions with the rest of the world over a period of time. 2. The principal items shown on the credit side are exports of goods and services, transfer receipts in the form of gift, etc. 3. The Balance of payments between the values of goods and services changed between two countries. 4. Balance of payments is a both visible and non – visible items.

Answer»

Balance of Trade:

1. Balance of Trade refers to the total value of a country’s exports of commodities and total value of imports of commodities.

2. Only export and import of commodities are included in the statement of Balance of Trade of a country.

3. The Balance of Trade between the values of goods exchanged between two countries.

4. Balance of Trade is a merchandise items or visible items only.

Balance of Payments:

1. Balance of payments is a systematic record of a country’s economic and financial transactions with the rest of the world over a period of time.

2. The principal items shown on the credit side are exports of goods and services, transfer receipts in the form of gift, etc.

3. The Balance of payments between the values of goods and services changed between two countries.

4. Balance of payments is a both visible and non – visible items.

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