The trade balance is

Question

Quizplus · Accepted Answer

The trade balance refers to the difference between a country's imports and exports of goods. While it is a major component of the current account balance, the current account also includes the balance of services, income, and transfers. Therefore, it is not identical to the current account balance. The financial account balance measures a country's transactions involving financial assets and liabilities, which is a separate concept from the trade balance. The financial account balance can be larger or smaller than the trade balance depending on various factors. Therefore, choices C and D are not correct.

The Trade Balance Is