Distinguish between Balance of payments and Balance of trade.
|Balance of payments||Balance of trade|
|1)||It is a systematic record of all international economic transactions of a country during a given period, usually a year.||It refers to the difference between the value of a country’s exports and imports for a given 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 includes the value of the exchange of goods and services among citizens, businessmen, firms, government, etc.||It includes the value of imports and exports of visible goods and invisible goods.|
|4)||Balance of payment is broader concept than balance of trade.||Balance of trade is a part of balance of payment.|
Concept: Concept of Balance of Payments
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