Question

Distinguish between Balance of payments and Balance of trade.

Answer 1

	Balance of payments	Balance of trade
1)	It is an organised list of all a nation's foreign business dealings over a specific time frame, typically a year.	It is the difference between a nation's import and export values over a specific time period.
2)	It is defined as “a summary statement of all the transactions between the residents of one country and the rest of the world.”	It is defined as “the relation over a period between the values of her exports and imports of physical goods.”
3)	It encompasses the value of the trade in products and services between individuals, companies, governments, and businesses.	Both visible and invisible commodities' import and export values are included.
4)	Balance of payment is broader concept than balance of trade.	Balance of trade is a part of balance of payment.