Multiple choice

Balance of trade includes

  1. Export and import of goods

  2. Export and import of services

  3. Export and import of known - how

  4. None of the above
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A Correct answer
Explanation

Balance of trade specifically refers to the difference between a country's exports and imports of goods (merchandise trade). It does not include services (which are part of the current account) or knowledge transfer. Services trade is accounted for separately in the balance of payments.

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