Final answer:
International trade involves the exchange of goods and services between countries, and it is influenced by factors such as absolute and comparative advantage. The balance of trade measures the difference between a country's exports and imports, while the balance of payments is a broader measure that includes financial transactions as well.
Step-by-step explanation:
International trade refers to the exchange of goods and services between countries.
Imports are goods and services that a country buys from other countries, while exports are goods and services that a country sells to other countries.
In international trade, countries can have an absolute advantage or a comparative advantage. Absolute advantage refers to the ability of a country to produce a good or service more efficiently than another country, while comparative advantage refers to the ability to produce a good or service at a lower opportunity cost.
The balance of trade is the difference between a country's exports and imports. A trade surplus occurs when a country exports more than it imports, while a trade deficit occurs when a country imports more than it exports.
The balance of payments is a broader measure that includes not only the balance of trade but also capital flows, investment income, and other financial transactions between a country and the rest of the world.