What is meant by balance of trade?

Answer 1

• The term Balance of Trade (or BOT) is the largest component of a country's current account in its balance of payments (BOP) accounts.

• It shows the difference between export earnings and import expenditure.

• It is called 'favorable' when the amount realized from physical (or tangible or visible) exports is more than the amount spent on physical imports, otherwise called 'unfavorable.'

• It is called also trade balance.