Distinguish between the following
1) Internal trade and International trade.
Internal trade refers to the buying and selling of goods within the geographical limits of a country.
International trade refers to the buying and selling of goods beyond the geographical limits of a country.
Only one country is involved.
Minimum Two countries are involved.
Payments are made and received in-home currency only.
Payment is made and received in mutually agreed foreign currency only.
Less degree of risk is involved
High degree of risk is involved, such as transit risk, risk of fluctuation of currency and demand, etc
Internal trade is not restricted, except on a few goods.
International trade is strictly monitored by the government and prior approval is required before international transactions.
2) Trends in imports and Trends in exports of foreign trade.
3) Balance of payments and Balance of trade.
Basic for comparison
Balance of payments
Balance of trade
Balance of Payment is a statement that keeps track of all economic transactions done by the country with the remaining world.
Balance of Trade is a statement that captures the country’s export and import of goods with the remaining world.
Transactions related to both goods and services are recorded.
Transactions are related to goods only.
Both the receipts and payment sides tallies.
It can be Favorable, Unfavorable, or balanced.
Balance of Payment is included.
The Balance of Trade is not included.
Current Account and Capital Account.
It is a component of the Current Account of Balance of Payment.