How to Calculate Goods & Service Balances

The goods and services balance is the difference between the monetary value of goods and services produced and those purchased from abroad. It's also called balance of trade and describes whether a country spends more money buying foreign goods than it earns selling domestic products. The calculation of the goods and services balance includes a few simple math operations. The following method can give you both the absolute value of trade deficit or surplus, as well as the ratio between money spent and money earned through international trade.

Instructions

  1. Absolute Value

    • 1

      Get reliable information on a country's international economic activities from official sources. Use government agencies, such as the Bureau of Economic Analysis (bea.gov) for the United States or the "Statistiches Bundesamt" for Germany (destatis.de). You can also seek information at the CIA World Factbook or the official data of the OECD (Organisation for Economic Co-operation and Development).

    • 2

      Note down the monetary value of net exports and net imports. Ensure they are both given in the same currency.

    • 3

      Subtract the figure of net imports from net exports. A positive result signifies a trade surplus while a negative result denotes a trade deficit. Remember to keep the same currency throughout the process.

    Export/Import Ratio

    • 4

      Place the net exports figure in the numerator position of a fraction and add the net imports as the denominator.

    • 5

      Remove the same amount of zeros from both figures. For example, if you have $35,000,000 on the numerator and $63,000,000 on the denominator, slash six zeros to remain with 35 and 63.

    • 6

      Check if division by any of the two numbers is possible. If not, divide both numbers with a common divisor. For the above example, do 35/7 and 63/7 to come up with 5/9. This means that for every $5 of goods or services sold, the country buys $9 of foreign products.

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