The balance of trade is the difference between a country's exports and imports 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 measure helps assess a nation's economic health and competitiveness in the global market. A positive balance of trade can strengthen a country's currency and boost economic growth, while a negative balance may lead to increased debt and currency depreciation. Factors influencing the balance of trade include exchange rates, domestic production, and global demand for goods and services.