24 Flashcards

1
Q

The balance of payments (BOP)

A

Records all financial transactions made between consumers, businesses and the government in a country with another

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2
Q

Current Account

A

Measures inflow and outflow of goods, services, investment incomes & transfer payments

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3
Q

Current Account makeup

A
  • Trade balance in goods
  • Trade balance in services
  • Net primary income
  • Net secondary income
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4
Q

Capital Account

A

Measures all transactions between entities in one country with the rest of the world

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5
Q

Capital account makeup

A
  • Capital transfers of fixed assets
  • Transfer of transferable contracts
  • Debt forgiveness
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6
Q

Financial Account

A

Measures transactions that result in change of ownership of financial assets and liabilities

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7
Q

Financial Account makeup

A
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8
Q

Causes Of Current Account Deficit

A

-> Non-price competitiveness
-> Strong exchange rate
-> Recession in trade partner
-> Volatile global prices

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9
Q

Current account deficit

A

debt > credits

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10
Q

Current account surplus

A

credits > debts

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11
Q

Primary income

A

income from loaning FOP abroad

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12
Q

Secondary income

A

income transfers between countries which occur with no corresponding output

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