BALANCE OF TRADE AMD BALANCE OF PAYMENTS

EXPORT AND IMPORT OF GOODS AND SERVICES BETWEEN TWO COUNTRIES ARE
CLASSIFIED RESPECTIVELY AS ‘VISIBLE’ AND ‘INVISIBLE’.VISIBLE ITEMS ARE THOSE
WHICH ARE PHYSICALLY EXPORTED AND IMPORTED,LIKE MERCHANDISE,GOLD
SILVER AND OTHER COMMODITIES.BALANCE OF TRADE REFERS TO THE
DIFFERENCE BETWEEN PHYSICAL IMPORTS AND EXPORTS,I.E VISIBLE ITEMS ONLY
FOR A PERIOD SAY,A YEAR.DURING A GIVEN PERIOD OF TIME,EXPORTS AND
IMPORTS MAY BE EXACTLY EQUAL IN WHICH CASE, THE BALAN CE OF TRADE IS
SAID TO BE BALANCED.IF THE VALUE OF EXPORTS OF A COUNTRY EXCEEDS THE
VALUE OF IMPORTS,THE COUNTRY IS SAID TO HAVE AN EXPORT SURPLUS OR A
FAVOURABLE BALANC OF TRADE,WHEN THE VALUE OF IMPORTS COMING TO A
COUNTRY IS GREATER THAN THE VALUE OF EXPORTS, THE BALANCE OF TRADE IS
SAID TO BE UNFAVOURABLE.