Which of the following best defines balance of trade?
A) Purchasing products in other countries and bringing them into one's own country
B) The total value of a nation's exports minus the total value of its imports over some period of time
C) The total flow of money into the country minus the total flow of money out of the country over some period of time
D) The ability to specialize in the production of a specific product and trade it for other needed products
E) The ability to produce a certain product more efficiently than any other nation

Question

Quizplus · Accepted Answer

Balance of trade refers to the difference between a country's exports and imports of goods over a specific period of time. If a country exports more than it imports, it has a trade surplus, and if it imports more than it exports, it has a trade deficit. This is commonly referred to as the trade balance. Option A describes importing goods from other countries, option C refers to capital flow or balance of payments, option D relates to comparative advantage and option E refers to productivity or efficiency.

Which of the Following Best Defines Balance of Trade