Economics 2 Marks Each

Value of imports and exports of tangible and intangible goods during a year is balance of payments.

• Balance of payment has two sides.
• Credit side and debit side.
• Incomes from foreign countries in the country are entered on credit side and all payments made to foreign countries are entered on debit side.
• Balance of payment of any country may be balanced or unbalanced.

Size of international trade means any country's gross quantum of import and export of tangible goods for the period of one year.

• Every year if the payment of import and income from export is increasing, increasing percentage of share in trade value in national income and its share increases in world trade, then the size of country's trade has grown, then only it can be said that the size of international trade has grown.

Accounting balance sheet of import-export, value of tangible goods of any country With foreign countries during one year or a year is called balance of trade.

• Condition of balance of trade of any country can be of three types Favorable, unfavorable and balanced.
• Value of tangible goods is higher than import it is favorable, if less than import it is unfavorable and if the value of import and export is similar then it is balanced of trade.

If the exchange rate rises for India and value of rupee falls, the demand for imports by India tends to decline and India’s exports tend to rise

A rise in exchange rate for India means that the value of Indian currency has declined in the international market.

The receipts and payments of fixed capital are recorded in capital account of balance of payments.

Surplus is said to be present in balance if the receipts are more than the of payments.

If payments are more than the receipts.

When the entries on the credit side equals to that on the debit side.

At constant prices or US dollars.

Gujarat government organizes ‘Vibrant Gujarat Summit’ to promote international trade.

International trade becomes more challenging for traders due to the difference of environment, language, culture, customs, preferences, habits, tastes etc. present in different countries.

When domestic cost of production is higher, it becomes cheaper and easier to import such goods from other country.

Imports of spare parts, know-how, intermediate goods, petrol, energy goods which are made in order to maintain and sustain the process of industrialization and development undertaken by developing countries are called maintenance imports.

Import of goods like capital, technology etc. by a developing country to give a boost to her development process are called developmental imports.

The items of exports which dominated the total exports of a country for a long period of time and export items produced by the traditional industries of a country are called traditional exports.

Sum total of value of merchandise imports and merchandise exports in the statement of trade accounts of a country during a year.

Nature of imports/exports means composition of trade, that is, the types/ items of merchandise imports and exports.

Trade means a commercial/business activity which involves exchange of goods, services, resources, capital, technology, know-how, intellectual property, etc. In other words, trade is an activity in which suqh goods are exchanged for earning profit.

The factors affecting balance of payments- are exchange rate, price of product or service in domestic and international market, quality and variety of the product, inevitable imports, level of country's economic progress, political and legal relation on trade, transportation, communication and infrastructural facilities.

To know trade attitude of any country, to know the development of its trade, and its attempts for international trade, to understand relations with other countries and to know the quality and competency of domestic product in international market it is necessary to know that country's size, nature and direction of foreign trade.

Trade activity carried out within the boundary of the country is called internal trade. e.g. Trade between Gujarat and Tamilnadu.

• Trade carried out beyond the boundary of the country is called foreign trade or international trade.
• E.g. Trade between India and America.