Question

The difference between the value of exports and value of imports of goods of a country in a given period of time is called _____.
1. Balance of trade
2. Trade surplus
3. Non - factor income
4. Net invisibles

Answer 1

Correct Answer - Option 1 : Balance of trade

The correct answer is Balance of trade

• Balance of trade (BOT) is the difference between the value of a country's exports and the value of a country's imports for a given period.
• It is the largest component of a country's balance of payments (BOP).
• Sometimes the BOT between a country's goods and the BOT of its services are distinguished as two separate figures.
• The balance of trade is also referred to as the trade balance.
• The formula for calculating the BOT= (Total value of exports - The total value of its imports)

• Trade Surplus: A trade surplus is an economic indicator of a positive trade balance in which the exports of a nation is greater than their imports.
• Non-factor income: The nonfactors include all invisible services like remittances and are not attributable to any of the factors of production
• Net invisible: Net invisible trade is the total international transaction that does not include an exchange of tangible goods.