Balanced Trade
 |
Definition of 'Balanced Trade'A condition in which an economy runs neither a trade surplus or a trade deficit. Under a balanced trade scheme between two countries, each country will agree to purchase as many goods as it sells to the other. A country looking to achieve balanced trade may use tariffs or barriers to trade to ensure that other countries purchase its goods. |
 |
Investopedia explains 'Balanced Trade'A balanced trade model is different than a free trade model, in which countries utilize their resources and comparative advantages to buy or sell as many goods and services as demand and supply allows. Achieving balanced trade may be difficult for countries that take part in international trade organizations, such as the World Trade Organization (WTO), as these organizations typically limit tariffs and trade barriers. |
Related Definitions
Articles Of Interest
-
Exploring The Current Account In The Balance Of Payments
Learn how a country's current account balance reflects the country's economic health. -
What Is International Trade?
Everyone's talking about globalization, so we explain what is it and why some oppose it. -
Globalization: Progress Or Profiteering?
Proponents of globalization argue that it helps the economies of developing nations and makes goods cheaper, while critics say that globalization reduces domestic jobs and exploits foreign workers. ... -
Getting Into International Investing
Diversifying can mean not only investing in various asset classes but also venturing beyond domestic exchanges. -
Do Cheap Imported Goods Cost Americans Jobs?
Flooding the market with cheap products can mean job losses and even market collapse - but dumping isn't as threatening as it seems. -
Introduction To Treasury Inflation-Protected Securities (TIPS)
If you want to protect your portfolio from inflation, all you need are a few TIPS. -
Nobel Winners Are Economic Prizes
Before you try to profit from their theories, you should learn about the creators themselves. -
Breaking Down The Balance Of Trade
The balance of trade is a key indicator of a nation’s health. Investors and market professionals appear more concerned with trade deficits than trade surpluses, since chronic deficits may be ... -
Open Market Operations Explained
The term “open market operations” refers to a monetary policy tool in which central banks buy and sell bonds to regulate the money supply in the economy. The United States employs open market ... -
Market Summary for July 26 2013
The major U.S. indices moved largely lower this week, with technical indicators suggesting that declines will continue next week, or at least that sideways trading will take hold.
Free Annual Reports