Which measure compares the value of a country’s visible exports with its visible imports in a given period?

Which measure compares the value of a country’s visible exports with its visible imports in a given period?

• A. The balance of payments
• B. The balance of trade
• C. The current account
• D. The exchange rate

Answer: (B)

The balance of trade is the measure that compares the value of a country’s visible exports with its visible imports. It looks at the difference between exports and imports of physical goods during a period, so if a country exports more goods than it imports, it has a trade surplus; if it imports more than it exports, it has a trade deficit. This focus on goods (visible trade) distinguishes it from the broader balance of payments, which covers all international transactions, and from the current account, which includes goods and services plus income and transfers. The exchange rate is simply the price of one currency in terms of another and does not itself measure the goods trade balance.

The balance of trade is the measure that compares the value of a country’s visible exports with its visible imports. It looks at the difference between exports and imports of physical goods during a period, so if a country exports more goods than it imports, it has a trade surplus; if it imports more than it exports, it has a trade deficit. This focus on goods (visible trade) distinguishes it from the broader balance of payments, which covers all international transactions, and from the current account, which includes goods and services plus income and transfers. The exchange rate is simply the price of one currency in terms of another and does not itself measure the goods trade balance.