Commerce

Differences between Balance of Trade and Balance of Payments

len Alfred Ajibola - Wed, 18th December, 2019 @ 13:51: PM

Topics in Commerce

Principle of Marketing: Positioning as a Marketing Mix Principle of Marketing: Packaging as a Marketing Mix Elements of Promotion in Marketing Mix Principle of Marketing: Promotion as a Marketing Mix Principle of Marketing: Place as a Marketing Mix Principle of Marketing: Price as a Marketing Mix Principles of Marketing: The 7 Ps of Marketing Mix Factors necessary for Division of Labour Disadvantages of Division of Labour Advantages of Division of Labour Outbound Marketing explained Inbound Marketing explained Production - Types of Production Commerce: Definitions and Scopes of Commerce Differences between Balance of Trade and Balance of Payments Balance of Payment Deficit and Balance of Payment Surplus Disadvantages of Foreign Trade Divisions of Foreign Trade Advantages of Foreign Trade What is Foreign Trade? Types of Foreign Trade


Academic Questions in Commerce

Please check out our Test Your Knowledge page to see all Questions and Answers

The followings are principles of marketing mix except _____.

  • A. People

  • B. Positioning

  • C. Pressure group

  • D. Packaging

  • E. Promotion

  • F. Product

The followings are advantages of division of labour EXCEPT _____.

  • A. It promotes the use of machines in production industries
  • B. There is an increase in profit
  • C. It saves time and expenses of training
  • D. It fosters the spirit of division
  • E. It increases the production of quality goods and services in the market
  • F. It increases a country's economic growth

Which of the following statement is incorrect concerning division of labour?

  • A. It is the specialization of works
  • B. It can become monotonous
  • C. It is the specialization of processes
  • D. The nature of a job is not a condition for division of labour
  • E. A person performs only a part of the job
  • F. Division of labour has some of its drawbacks

What does a bearer cheque mean?

What is an order cheque?

LEN ACADEMY SMART SCHOOL SOFTWARE

Image

Click here to read more on its smart academic features. Please kindly recommend to your school

Please click here to kindly support education


Differences between Balance of Trade and Balance of Payments:

Let's begin be defining what Balance of Trade and Balance of Payments are.

Balance of Trade can simply be defined as the import and export of goods only.

Please read on Foreign (International) Trade here.


Balance of Payments is defined as the record showing the relationhip between a country's total payment made to other countries and the total money received by them from other countries within a time period.

Balance of Payments can be put into 2. These are:

  1. Balance of Payments Surplus.
  2. Balance of Payments Deficit.
  3. Please read on Balance of Payment Deficit and Balance of Payment Surplus here.

Note: An understanding on the concept of Balance of Trade and Balance of Payments will give you a better insight into their differences.

Please read on the introduction to Balance of Trade and Balance of Payments here.


Below are the Differences between a Balance of Trade and Balance of Payments:

Balance of Trade

Balance of Payments

It is the total value of goods imported and exported by a country during a specific period; usually yearly or annually

It  is the record showing the relationship between a country’s total payment made to other countries and the total money received by them from other countries within a time period

It helps a country evaluate its net profit and net loss incurred only from the importation and exportation of goods

It gives us a proper accountability beyond the importation and exportation of goods

Unilateral and Capital transfers are not part of balance of trade

Unilateral and Capital transfers are part of balance of payments

It deals with the difference between the export and import of goods only

It deals with the differences between the inflow and outflow of foreign exchange

Please read on the Differences between Scale of Preference and Opportunity Cost.

If You are a Student, Teacher or Lover of Education, please click here to follow LEN ACADEMY on Google News


len

Alfred Ajibola is a Medical Biochemist, a passionate Academician with over 7 years of experience, a Versatile Writer, a Web Developer, a Cisco Certified Network Associate and a Cisco CyberOps Associate.


Please Register here or Login here to contribute to this topic by commenting in the box below.

CONTRIBUTE TO THIS TOPIC | ASK A QUESTION


Amazing facts in Commerce

Amazon is an e-commerce website launched in 1995. It did not make any profit for its first seven years.

Amazon's first profit was in 2003. Its founder 'Jeff Bezos' is the richest man in the world as at 2018/2019


NOTABLE POINTS IN Commerce

Commerce can be defined as the exchange of goods and services, usually for money and on a large scale that will require the transportation of such goods and services.

Commerce is crucial (important) to the life of any Nation for the following reasons:

  1. Commerce facilitates the exchange of goods and services which everyone can enjoy, regardless their location or whether the goods is produced within or outside their country.
  2. Commerce creates an awareness of the existence of goods and services through advertising.
  3. Commerce offers employment to a very large number of people in a Nation.
  4. Commerce promotes rapid transfer of both oral and written messages through communication.
  5. Commerce determines the standard of living in a Nation. This is because the extent of commercial activities is crucial to wealth of  a nation.
  6. Commerce makes for the protection against risk in day to day business operations.
  7. Through commerce, there is a steady supply of goods in a Nation. This is because commerce ensures that goods produced are stored until needed.

Please read on the functions and characteristics of commerce here

A public company is not owned by an individual; rather it's usually owned by groups or a large number of people.

The shares of a public company are traded freely on the stock exchange.

Below are some features of a public company:

  1. A public company must receive it’s training certificate to commence business.
  2. The minimum membership is two while the maximum membership is limitless.
  3. A public company has a legal status. It can sue and be sued.
  4. A public company files and publishes its annual reports, including its accounts.
  5. The liability of its members is limited.
  6. The shares are easily transferrable through the stock market.
  7. A public company can issue debentures to be secured as its assets.

Please read on Limited Liability Company, Its Advantages and Disadvantages here

There are seven elements of the marketing mix. These are:

  1. Product: Anything thing that satisfies a consumer’s need is referred to as a product. Product may come in the form of manufactured goods, raw materials or services.
  2. Price: Price is defined as the exchange value of goods and services supplied. In simple terms, it serves as a mechanism of exchange.
  3. Promotion: It involves all the processes that concerns with how business organizations should inform their customers about its product. If done properly, the demand of product will be increased. Promotions can take the form of advertising, search engine optimization, social media marketing, trade fairs exhibition and so on.
  4. Place: The place as a marketing mix concerns variables such as location and transport facility where the distribution of goods and services take place.
  5. Packaging
  6. Positioning
  7. People

Think of marketing mix as the set of marketing tools that an industry or company uses to drive or accomplish its marketing objectives in the target market

Please read on the Principles of Marketing Mix here