Here, we would like to make a sharp distinction between balance of
international trade and balance of international payments as they are often
confused by the readers.
The total balance of international payments is
customarily divided into three sections:
"The equilibrium of balance of international payment is a statement that takes into account
the debits and credits of a country on international account during a calendar
year". Continue reading.
We have stated earlier that a country must obtain equilibrium in her balance
of payments with other countries in the long run. When the balance of payments
is favorable, it can be looked at with satisfaction from her point of view
because the surplus will be invested abroad in securities.