Balance Of Payment Ls

Question 1

Features of the balance of payments

Answer 1

Capital account
Finacial account
Current account

Question 2

Capital account

Answer 2

Sales of tangible assets
Transfers in finacial assets by migrants

Question 3

Current account

Answer 3

Tracks:
Trade in goods
Trade in services
International flows of income

Question 4

Financial accounts

Answer 4

FdI
Portfolio investment
Transactions in other financial assets
Reserve assets

Question 5

Current account surplus causes

Answer 5

High domestic demand- less imports
Exports>imports
High inflation lower export prices-increase demand for them as a result

Question 6

Current account surplus consequences

Answer 6

Lower unemployment- inc domestic demand
Economic growth

Question 7

Current account deficit causes

Answer 7

Imports>exports
Econ growth as it increases demand for imports

Question 8

Current account deficit consequences

Answer 8

Increased supply of a currency in foreign markets

Question 9

Financial account deficit

Answer 9

Money flowing out of an economy is greater than money flowing in

Question 10

Financial account surplus

Answer 10

Money flowing into a country is greater than money flowing out

Question 11

Short and long term capital and financial flows

Answer 11

Long term - FDI and portfolio investment
Short terms - hot money through speculation

Question 12

Terms of trade

Answer 12

Low - export prices are lower than import and VICE VERSA

Question 13

Terms of trade

Answer 13

Low - export prices are lower than import and VICE VERSA