This ppt includes Balance of Trade - Importance and Types

1. Presented by,
Chandana K.
2nd M.Com
Under the guidance of
Sundar B. N.
Asst. Prof. & Course Co-ordinator
GFGCW, PG Studies in Commerce
Holenarasipura

2. BALANCE :
A state of equilibrium or equal distribution of
weight, amount etc..
TRADE:
The act or process of buying ,selling or exchange
commodities at either wholesale within country Or between
countries. Also called domestic trade or foreign trade.
INTRODUCTION

3. Add your title
TYPES OF TRADE
1. Domestic Trade :-
a. Wholesale :- The sale of goods in large quantities
b. Retail :- The sale of goods to ultimate consumers
usually
2. International trade :-
a. Export :- send goods to another country for sale
b. Import :- To bring a product into a country for trade or
sale
c. Enterpot trade :- Trade in which imported goods are
re-exported with or without any additional processing
or packaging

4.  It is the difference between countries imports
and Exports over a period of time.
 It is the largest component of the Balance of
payments for all Nations.
 Balance of trade is one of the indicators of
economy.
BALANCE OF TRADE

5. Debit :
Items include
Credit :
items include
a. Export
b. Foreign spending
c. Investment in domestic economy
• Foreign and aid
• Imports and domestic spending
• Investments abroad

6. Importance of B O T
 It shows how a country competes in a global Market
place.
 IT determines the health of the economy and its
relationship with the rest of the world
 It includes physical goods and intangible services.
 it is very important piece of understanding the
Global puzzle of international trade.

7. Add your title
Positive or favorable of B O T
1. When the exports are greater than imports then
balance of trade is positive.
2. A positive balance of trade is known as the trade
surplus and occurs when the value of exports in
higher than that of imports.
Negative or unfavorable of B O T
1. When the imports are greater than exports when
balance of trade is negative.
2. A negative balance of trade is known as a trade
deficit or a trade gap.

8. Exports:- send goods or
services to another country for
sale.
Imports:- To bring a product
into a country to be sold bring.

9. Advantage of exports Challenges of exports
 Earning more money.  High transportation fees
 Increased sales and profit.  Entering on exports and business
requires careful planning
 Unwastage of things.  Market information
 Gain global shares.  Financial risk
 Lower per unit costs.  Security reasons

10.  Lower price rate.  Needs funds to importing.
 High quality.  Risk to sale.
 Consumer benefit.  Transport costs.
Advantage of
import
Challenges of
import

11. Process of exports and imports :
 Methods of export include a product or goods or information being
mailed, hand deliverd, shipped by air, shipped by vessel ,uploaded
to an internet site or downloaded from an internet site.
 Export also include the distribution of information that can be sent
in the form of an email, and email attachment, a tax or can we
shared during a telephone conversation .

12. Factors effective balance of trade :
 Cost of production in exporting economy compared
to that in importing economy.
 Exchange rates.
 Restrictions on trade.
 Cost and availability of inputs like raw materials.
 Availability of sufficient foreign exchange to be
used for payment for inputs.
 Price of locally manufactured goods.

13. Conclusion
Balance of trade usually refers across business
cycles.
Where exports are more than imposed .there
will be improvement balance of trade.
This is during expansion of the economy.
A country that is characterized with high
domestic or important demand will experience
and unfavourable balance of trade.
This is when I get to a similar stage in the
business cycle.

14. Reference:
• https://www.slideshareEddysydney/balance-of-
trade
• https://www.investopedia.com
• https://www.en.m.wikipedia.org
Thank you