2.5 Balance Of Payments Flashcards
What is the balance of payments
It is a record of all financial transactions made between consumers, firms and the government from one country with other countries
It states how much is spent on imports, and what the value of exports is
What are exports
What are imports
What is the balance of payments made up of
The current account
The capital and financial account
Balancing item
What is the current account
What is the capital and financial account
What is the balancing item
Why is achieving a sustainable balance of payments position an important macroeconomic policy objective
What is the meaning of balance of payments imbalances
What is a current account deficit and surplus
How does an appreciation of the currency impact the current account
How does economic growth impact the current account
How does higher competition impact the current account
How does deindustrialisation impact the current account
How do memberships of trade unions impact the current account
What are capital account deficits and surpluses
How does attractiveness to foreign investors impact the capital account
What are the consequences of imbalances on the balance of payments
What policies are used to correct imbalances on the balance of payments
Fiscal policy
Monetary policy
Supply-side policies
How is fiscal policy used to correct imbalances on the balance of payments
How is monetary policy used to correct imbalances on the balance of payments
How is supply-side policies used to correct imbalances on the balance of payments
