When a country trades with other nations, it exports goods (sells) or imports goods (buys). Balance of trade (BOT) is only the difference between the two. If a country exports greater than it imports, then it will have a trade surplus.
If it imports greater than it exports, then it will have a trade deficit. The balance is significant to the economy, influencing jobs, currency value, and economic growth.
Learning Imports and Exports through Easy Examples
Consider a small enterprise selling handmade products. If it sells more to consumers in other towns than it purchases from suppliers, it is in profit. However, if it pays more to purchase supplies than it receives through sales, it incurs a loss. The same applies to trade on a national scale.
