ZIMSEC O Level Commerce Notes:Visible and Invisible trade
- Trade in services only e.g. tourism, freight, insurance.
- Calculated for given periods of time, usually one year.
- Invisible balance= exported services value-minus imported services value.
- For example Tourists coming to Zimbabwe $25 million.
- Banking services provided by Zimbabwean banks to foreigners $56
- Tourists from Zimbabwe to other companies. $14 million
- Banking services provided to Zimbabweans in other countries. $ 117 million.
- The invisible balance= (25+56) – (14+17)
- $50 million.
- In this case the invisible balance is said to be favourable.
- A favourable balance is also called a surplus.
- This means Zimbabwe exported more services than it imported.
- If the balance is negative it is said to be unfavourable.
- An unfavourable balance is also known as a deficit.
- This would mean Zimbabwe imported more services than it exported.
- is trade in goods only e.g. minerals such as diamonds.
- It is calculated for a given year.
- Visible balance ( Balance of trade)= Exported goods value-imported goods value
- For example in a given year:
- Zimbabwe exported goods to other countries worth $4.9 billion.
- It imports goods worth $9 billion.
- The balance of trade (BoT)=4.9-9
- $-4.1 billion.
- This is an unfavourable balance.
- It is also known as a deficit.
- It means Zimbabwe exported less goods ( in value terms) than she imported.
To access more topics go to the Commerce Notes page.
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