Commerce · Class 11 Commerce
Ch 28Balance of Trade and Balance of Payments — Class 11 Commerce, concept-first.
Every country buys goods from, and sells goods to, other countries. Balance of Trade (BOT) is the difference between the value of a country's visible exports (goods physically shipped out) and its visible imports (goods physically brought in) during a given period, usually a year.
Key concepts
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Balance of Trade
Balance of Trade (BOT) is the difference between a country's visible exports and visible imports of goods during a period.
Most relevant Q&A
Chapter contents
The NCERT structure, section by section. Open a section to see its questions, then read the concept-first solution.
Meaning of Balance of Trade
Every country buys goods from, and sells goods to, other countries. Balance of Trade (BOT) is the difference between the value of a country's visible exports (goods physically shipped out) and its vis…
Balance of Payments — Meaning and Definition
The Balance of Payments (BOP) is a systematic, statistical record of all economic transactions — of goods, services, income and capital — between the residents of one country and the residents of the…
Components of the Balance of Payments
The Balance of Payments is divided into three broad accounts.
Balance of Trade vs Balance of Payments
Although the two terms are related, they are not the same thing — BOT is only one line item inside the much wider BOP.
Disequilibrium in the Balance of Payments
A country's BOP is said to be in equilibrium when its total receipts from the rest of the world equal its total payments to the rest of the world over a period.
Correcting Disequilibrium in the Balance of Payments
Once a persistent deficit is identified, a country has several categories of policy tools to correct it.
Exercises
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- Q1What is meant by Balance of Trade? State its types.Free
- Q2Define Balance of Payments. Why is it said to always 'balance'?Free
- Q3Explain the components of the Current Account and the Capital Account of the Balance of Payments.Free
- Q4Distinguish between Balance of Trade and Balance of Payments.Preview
- Q5Classify the following items as belonging to the Current Account or the Capital Account of India's Balance of Payments: (i) Export of textil…Preview
- Q6What is meant by disequilibrium in the Balance of Payments? State its causes.Preview
- Q7Distinguish between a deficit Balance of Payments and a surplus Balance of Payments.Preview
- Q8Explain the monetary measures used to correct disequilibrium in the Balance of Payments.Preview
- Q9Explain the trade (non-monetary) measures used to correct disequilibrium in the Balance of Payments.Preview
- Q10"A favourable Balance of Trade is not always a sign of a strong economy." Comment.Preview
Sample & Board Papers
Sample papers and previous-year board questions for this subject.
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- Q1The statement which discloses a record of transactions between the residents of one country and residents of foreign country : (a) Statement…Preview
- Q2What do you mean by Balance of Trade ?Preview
- Q3Balance of Payments surplus indicates : (a) Exports and Imports are above Equilibrium (b) Exports are more than the Imports (c) Imports are…Preview
- Q4What are the credit items shown in Current account ? (any 3)Preview
- Q5The Balance of payments consists of ......... (a) Current Account (b) Capital Account (c) Receipts and Payments Account (d) Both current acc…Preview
- Q6What are the credit items shown in current accounts (any 3)Preview