What is the difference between balance of trade and current account balance?

What is the difference between balance of trade and current account balance Introduction: The Global Economic Web Hello everyone, and welcome to today's video! In our interconnected world, economic ties between nations have become increasingly intricate. As countries engage in trade, investment, and other financial transactions, various measures are employed to gauge their economic health. Two such measures are the balance of trade and the current account balance. While they may seem similar at first, a closer examination reveals their unique characteristics and implications. So, let's dive in! Defining the Balance of Trade The balance of trade, often referred to as the trade balance, is a straightforward concept. It represents the difference between the value of a country's exports and its imports over a given period. In essence, it captures the monetary worth of goods and services a nation sells to the world versus what it buys. A positive trade balance, known as a trade surplus, occurs when exports exceed imports. Conversely, a negative trade balance, or a trade deficit, arises when imports surpass exports. Factors Influencing the Balance of Trade