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Trade balance is an economic indicator that measures the difference between a country's exports and imports of goods and services. A positive trade balance occurs when a country's exports exceed its imports, while a negative trade balance occurs when a country's imports exceed its exports.
Trade balance is an essential indicator for businesses, investors, and policymakers as it provides valuable insights into a country's international trade position. A positive trade balance is typically viewed as a sign of economic strength as it indicates that a country is exporting more than it is importing, leading to an increase in foreign exchange reserves and potentially stimulating economic growth. On the other hand, a negative trade balance may indicate a country's dependence on imports, potentially leading to a depletion of foreign exchange reserves and a decrease in economic growth. Additionally, changes in trade balance can also indicate changes in global economic conditions, such as shifts in exchange rates or changes in trade policies.
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