What does the term "balance of trade" refer to?

The term "balance of trade" specifically refers to the difference between the value of a country's exports and imports over a certain period of time. This measure is an important indicator of a country's economic health and its trade relationships with other nations. A positive balance of trade, which is referred to as a trade surplus, occurs when a country exports more than it imports, while a negative balance of trade, known as a trade deficit, happens when imports exceed exports. By focusing on the values of goods and services traded internationally, the balance of trade provides insights into how well a country's economy is performing in the global market.

Other options address related concepts but do not accurately define the balance of trade. For instance, surplus over imports refers to a specific outcome (trade surplus) rather than the definition of the balance itself. The total value of goods and services produced pertains to gross domestic product (GDP), while foreign investment helps understand external economic influence but is distinct from trade balances.