BALANCE OF PAYMENT AND BALANCE OF TRADE.
Hey Guyz, Happy Monday. How was the weekend, mine
was cute, hope yours was lovely? Any way this is a new week and a new day to
live, learn and have fun. So let’s get started.
Balance
of Trade is the relationship between the values of a country’s
import and export of visible items within a particular period of time.
If Visible Exports are more than Visible Imports,
the Balance of Trade is said to be favorable. On the other hand, if the Visible
Import exceeds the Visible Exports, the country is said to have unfavorable
Balance of Trade.
Balance
of Payment is a statement/record showing the
relation between a country’s total payment to other countries and its total
receipt from other countries in a year. In other words, it is the comparison of
the sum total of a country’s receipt from export and the total payment made for
import. Balance of Payment of a country shows the yearly statement of income
and expenditure from visible and invisible export, and visible and invisible
import respectively.
A Country’s Balance of Payment can be divided into
three parts:
