Question

Balance of Trade and Balance of Payment are two different concepts.

Options

• Agree

• Disagree

Answer 1

I agree with the given statement.

Explanation:

1. Balance of payments is a systematic record of all international economic transactions of a country during given period, usually a year.
2. On the other hand, balance of trade refers to the difference between the value of a country’s exports and imports for given period.
3. Balance of payment is broader concept than balance of trade. 
4. Balance of payments includes the value of exchange of goods and services among citizens, businessmen, firms, government etc.
5. Balance of trade includes the value of imports and exports of visible goods and invisible goods.

Therefore, balance of payment and balance of trade are two different concepts.