Which one of the following statements is an accurate definition of trade balance?

• A. Trade balance refers to the total value of goods produced within a country.
• B. Trade balance is the sum of all government spending and taxation.
• C. Trade balance is the amount of foreign investment a country receives.
• D. Trade balance is the difference between a country's exports and imports of goods and services.

Answer: (D)

Verified step by step guidance

1. Understand that the trade balance is a concept in international economics that measures the difference between the value of a country's exports and imports.
2. Recall that exports are goods and services sold by a country to other countries, while imports are goods and services purchased from other countries.
3. Recognize that the trade balance can be positive (trade surplus) if exports exceed imports, or negative (trade deficit) if imports exceed exports.
4. Note that the trade balance does not refer to total production within a country, government spending, taxation, or foreign investment, but specifically to the net exports of goods and services.
5. Therefore, the accurate definition of trade balance is: the difference between a country's exports and imports of goods and services.