The Balance of Trade refers to the difference between a country's exports and imports of goods and services over a specific period. When a country exports more than it imports, it has a trade surplus, while a trade deficit occurs when imports exceed exports. This balance is a crucial component of a nation's overall economic health. A positive balance of trade can strengthen a country's currency and contribute to economic growth, while a negative balance may lead to increased debt and currency depreciation. Governments often monitor the balance of trade to inform economic policies and trade agreements, impacting global trade dynamics.