Balance of Payment Flashcards
transactions occuring in order to compensate for differences between payments and recipients arising from country’s autonomous transactions
accommodating (offsetting) transaction
a summary statement of all transactions that take place between country and the rest of the world
balance of payment
this records all transactions involving goods and services
current account
these are independent of BOP in the sense that they are affected by factors outside the BOP statements
autonomous transactions
this refers to services and other products that do not result in the transfer of physical objects
invisible trade balance
category II
financial/capital flows account
central banks often buy or sell international reserves in private asset markets to affect macroeconomic conditions in their economies
official foreign exchange intervention
factors outside BOP statements
- exports and imports
- transfers and public transactions
- net capital movement
are foreign assets held by central banks as cushion against national economic misfortune
official international reserves
category III
changes in reserve assets of official monetary authorities
imports < exports
CA surplus
the level of net central bank financial flows
official settlements balance
financial account balance
C2 + C3
this records all transactions involving short term and long term assets
capital account
constitutes an additional measure of balance in the balance of payments that has received substantial attention in country A
financial account balance
existence of accomodating or financing transactions is evidence of
balance of payment disequilibrium
category I
current account
six different measure of balance
- merchandise trade balance
- balance on goods and services
- balance on goods, services, and factor income
- current account balance
- official reserve transactions balance
- financial account balance
imports > exports
CA deficit
