It
is the difference between a country's imports and its exports. It is the sub
set of Balance of Payment. When exports are greater than imports than the BOT
is favorable and if imports are greater than exports then it is unfavorable.
They key features are:-
Features
of BOT
Balance of trade is the largest
component of a country's balance of payments.
It includes only visible items
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.
