The Balance of trade denotes the sum of merchandise exports and merchandise imports of a country.  Is this true or false?

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justaguide | College Teacher | (Level 2) Distinguished Educator

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Balance of trade is the net exports of goods and services by a nation during the period over which it is being calculated. Net exports mean the difference between the value of goods and services exported and the value of the goods and services imported.

This makes your definition for balance of trade as the "sum between merchandise exports and merchandise imports of a country," false.

If a nation exports goods and services that have a value higher than the value of the goods and services imported, a trade surplus is created. On the other hand if the balance of trade is negative there is a trade deficit.

It is not possible for any nation to maintain a trade deficit over a prolonged period of time as that involves borrowing funds from other nations and this cannot be done forever as the lenders expect to be repaid.

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