The advantages of international trade are obvious. Trading with other nations can also pose problems if a country's imports and exports do not balance out, though.{{U}} (31) {{/U}}deciding whether a balance does or does not exist, economists use two measures: balance of trade and balance of payments.
The total economic value of all products imported{{U}} (32) {{/U}}a country compared to the total economic value of ail other products exported out of the country is that nation's balance of trade. Relatively small imbalances in the value of imports and exports for a country are quite common and{{U}} (33) {{/U}}very important.
However, sometimes a country's trade imbalance can be very large. For example, Japan exports goods and services equal{{U}} (34) {{/U}}about 15 percent of everything it manufactures. However, it only needs to import goods and services equal to around 5 percent{{U}} (35) {{/U}}what it manufactures at home. The difference amounts{{U}} (36) {{/U}}a trade surplus (a positive balance of trade) of several billion dollars each year.
Japan is generally content{{U}} (37) {{/U}}its trade imbalance, because it results{{U}} (38) {{/U}}more money flowing into the country than flowing out. However, some of its trading partners are not. For the last several years, the United States has been importing more than it exports, resulting in a trade deficit (a negative balance of trade).{{U}} (39) {{/U}}a result, more money is leaving the United States{{U}} (40) {{/U}}entering it.