What is Balance of Trade and Balance of Payments? How can a country default on payment?

Balance of Trade (BOT) is an economic measure of the difference in value between a country's imports and exports over a period of time.

Balance of Payments (BOP) is a record of all the economic transactions between a country and the rest of the world over a period of time, such as money sent overseas for investments and purchases.

A country may default on payment if it is unable to meet its financial obligations, such as debt payments or loans.

A country can fall into default if it spends more money than it earns in taxes and other revenues, or if it is unable to access foreign exchange markets to finance its debt payments.

A country can also default if it experiences a financial crisis, such as a banking crisis or a currency crisis.

For example, Argentina defaulted on its debt payments in 2001 after an economic crisis led to the devaluation of its currency and a sharp rise in inflation.

Greece defaulted on its debt payments in 2015 after years of high government spending and rising public debt.

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