14.3 Balance of Payments

Question 1

Balance of payments

Answer 1

Record of all currency flows into and out of a country in a given time period.

Question 2

Record of all currency flows into and out of a country in a given time period.

Answer 2

Balance of payments

Question 3

Current account

Answer 3

Currency flows into and out of a country for:

• goods and services
• primary and secondary income flows

in a given time period.

Question 4

Currency flows into and out of a country for:

• goods and services
• primary and secondary income flows

in a given time period.

Answer 4

Current account

Question 5

Financial account

Answer 5

Records capital flows into and out of the economy

Question 6

What are the components of the Current account?

Answer 6

1) Balance of trade in goods.
2) Balance of in services.
3) Primary income flows.
4) Secondary income flows.

Question 7

What does ‘Inward Primary Income Flows’ constitute in the Current Account?

Answer 7

Income from UK owned capital assets located overseas.

Question 8

What does ‘Outward Primary Income Flows’ constitute in the Current Account?

Answer 8

Outward flowing income paid to overseas investors for assets located in the UK.

Question 9

What does the ‘Balance of secondary income’ constitute in the Current Account?

Answer 9

Gifts of money, international aid, transfers between UK and EU flowing into or out of the UK in a given time period.

Question 10

Gifts of money, international aid, transfers between UK and EU flowing into or out of the UK in a given time period.

Answer 10

Balance of secondary income