The balance of trade measures the difference in value over a period of time between a country's imports and exports of merchandise. A favorable balance, or trade surplus, occurs when exports exceed imports, while an unfavorable balance, or trade deficit, occurs when imports outweigh exports.
A trade deficit occurs when a country's imports exceed its exports, resulting in a negative balance of trade, while a trade surplus occurs when exports exceed imports, leading to a positive balance of trade.
An unfavorable balance of trade, also known as a trade deficit, occurs when the value of a country's imports exceeds the value of its exports. It indicates that a country is purchasing more goods and services from other nations than it is selling abroad.
