Question

Distinguish between Balance of Trade and Balance of Payments.

Write any two differences between balance of trade and balance of payment.

Answer 1

Sr. No.	Balance of Trade	Balance of Payments
1.	Balance of Trade refers to the total value of a country’s exports of commodities and the total value of imports of commodities.	The balance of payments is a systematic record of a country’s economic and financial transactions with the rest of the world over a period of time.
2.	Only the export and import of commodities are included in the statement of balance of trade of a country.	The principal items shown on the credit side are exports of goods and services, transfer receipts in the form of gifts, etc.
3.	The balance of trade is the difference between the values of goods exchanged between two countries.	The balance of payments between the values of goods and services changed between two countries.
4.	Balance of Trade is a merchandise item or visible items only.	The balance of payments includes both visible and non-visible items.