Balance Of Trade - BOT

The difference between a country's imports and its exports. Balance of trade is the largest component of a country's balance of payments. Debit items include imports, foreign aid, domestic spending abroad and domestic investments abroad. Credit items include exports, foreign spending in the domestic economy and foreign investments in the domestic economy. A country has a trade deficit if it imports more than it exports; the opposite scenario is a trade surplus.

Also referred to as "trade balance" or "international trade balance"

The balance of trade is one of the most misunderstood indicators of the U.S. economy. For example, many people believe that a trade deficit is a bad thing. However, whether a trade deficit is bad thing is relative to the business cycle and economy. In a recession, countries like to export more, creating jobs and demand. In a strong expansion, countries like to import more, providing price competition, which limits inflation and, without increasing prices, provides goods beyond the economy's ability to meet supply. Thus, a trade deficit is not a good thing during a recession but may help during an expansion.


Investment dictionary. . 2012.

Look at other dictionaries:

  • Balance of trade — Balance Bal ance (b[a^]l ans), n. [OE. balaunce, F. balance, fr. L. bilanx, bilancis, having two scales; bis twice (akin to E. two) + lanx plate, scale.] 1. An apparatus for weighing. [1913 Webster] Note: In its simplest form, a balance consists… …   The Collaborative International Dictionary of English

  • balance of trade — ► balance of trade the difference in value between a country s imports and exports. Main Entry: ↑balance …   English terms dictionary

  • balance of trade — n [singular] the difference in value between the goods a country buys from abroad and the goods it sells abroad …   Dictionary of contemporary English

  • balance of trade — noun singular the difference between the value of all the goods a country sells to foreign countries and all the goods it buys from them …   Usage of the words and phrases in modern English

  • balance of trade — n. the difference in value between all the merchandise imports and exports of a country …   English World dictionary

  • Balance of trade — Cumulative Current Account Balance 1980–2008 based on the International Monetary Fund data …   Wikipedia

  • balance of trade — the difference between the values of exports and imports of a country, said to be favorable or unfavorable as exports are greater or less than imports. [1660 70] * * * Difference in value over a period of time between a nation s imports and… …   Universalium

  • Balance of trade — Net flow of goods (exports minus imports) between countries. The New York Times Financial Glossary * * * balance of trade ˌbalance of ˈtrade noun [singular] ECONOMICS 1. the part of a country s balance of payments that relates to the value of… …   Financial and business terms

  • balance of trade — net flow of goods (exports minus imports) between two countries. Bloomberg Financial Dictionary The difference between a country s imports and exports. Chicago Mercantile Exchange Glossary * * * balance of trade ˌbalance of ˈtrade noun [singular] …   Financial and business terms

  • balance of trade — noun the difference in value over a period of time of a country s imports and exports of merchandise a nation s balance of trade is favorable when its exports exceed its imports • Syn: ↑trade balance, ↑visible balance, ↑trade gap • Hypernyms:… …   Useful english dictionary

  • balance of trade — balances of trade N COUNT: usu sing A country s balance of trade is the difference in value, over a period of time, between the goods it imports and the goods it exports. The deficit in Britain s balance of trade in March rose to more than 532100 …   English dictionary

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.