What is the definition of the balance of trade?

The balance of trade is defined as the difference between a country's exports and imports of goods and services. This concept is crucial in understanding a country's economic standing in the global market. When a nation exports more than it imports, it has a trade surplus, indicating that it is a net lender to the rest of the world. Conversely, if a country imports more than it exports, it has a trade deficit, which can imply economic challenges.

This measure directly influences a nation's revenue and can reflect the nation's competitiveness and economic health. It is a key component in calculating the overall balance of payments, which tracks all economic transactions between residents of a country and the rest of the world.

The other options refer to different economic concepts: one speaks about government fiscal policies, another measures production output, and the last focuses on the impact of tourism, all of which do not pertain to the specific measure of trade in goods and services.