Problem 10

Introduction

The commercial balance, known colloquially as the balance of trade, reflects the difference in financial worth between a nation's foreign trade over time. As a result, it is calculated as the net aggregation of a nation's exports and imports, ignoring any financial investments, transfers, and other financial considerations. A positive trade balance occurs when the value of exports exceeds the value of imports, while a deficit balance of trade occurs when the value of imports exceeds the value of exports.