Fichas
Balance of Payments
Fichas del conjunto (9)
- 1What does the balance of payments do?It records all financial transactions of a country with other countries. It records all flows of money into and out of a country
- 2What are the three accounts of the BOP?1. Current Account
2. Capital Account
3. Financial Account - 3Name the four sections of the Current Account1. Trade in goods
2. Trade in services
3. Investment and Employment income (primary income)
4. Transfers (secondary income) - 4What occurs in the trade in goods section of the current account?Trade in goods measures imports and exports of visible goods eg. pharmaceuticals and oil
- 5What occurs in the trade in services section of the current account?Trade in services measures the imports and exports of services such as tourism
- 6What occurs in the investment and employment income section of the current account?This covers the flow of money in and out of a country resulting from employment or earlier investment
- 7What occurs in the transfers section of the current account?Transfers are the movements of money between countries which aren't paying for goods or services and are not the result of investment eg. payments made to family members abroad
- 8Give three causes of a current account deficit in a country1. High levels of consumer spending
2. It's struggling to compete internationally
3. It has to deal with external shocks - 9Why might a country experience a current account surplus?1.It has been experiencing a recession
2. The value of the currency is low
3. High interest rates