Final answer:
The balance of trade refers to the monetary difference between a nation's exports and imports. A trade surplus occurs when exports exceed imports, leading to positive economic growth. A trade deficit occurs when imports exceed exports, which can have negative impacts on employment and economic growth.
Step-by-step explanation:
The balance of trade, also known as trade balance, refers to the monetary amount by which a nation's merchandise exports exceed imports during a given time period, usually one year. When exports exceed imports, the economy has a trade surplus. This means that the nation is selling more goods and services to other countries than it is buying from them, leading to positive economic growth and increased employment opportunities.
On the other hand, if imports exceed exports, the economy has a trade deficit as it is buying more from other countries than it is selling, which can lead to negative impacts on employment and economic growth.