Trade

Definition

Trade involves exchanging goods or services between individuals, firms, or countries. It allows for specialization based on comparative advantage and enables access to goods that cannot be produced domestically.

Related terms

Imports: Imports are goods or services purchased from other countries.

Exports: Exports are goods or services sold to other countries.

Balance of Trade: The balance of trade is the difference between the value of a country's exports and the value of its imports. A positive balance indicates a trade surplus, while a negative balance indicates a trade deficit.