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Balance of Trade

Balance of trade is a commonly used term in international trade. It is a measure of net flows of merchandise in a country, meaning exports minus imports.

Economists tend to favor a 'positive' balance of trade, where exports exceed imports, and thus point to a trade surplus. This is as opposed to an unfavorable state of trade deficit, where imports exceed exports.

Balance of trade is also referred to as visible trade.

Also see: absorbtion approach, trade deficit, trade surplus

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