Balance Of Payments Flashcards
1
Q
Define balance of payments
A
A record of all an economy’s financial transactions with the rest of the workd
2
Q
How to calculate balance of payment
A
Inflows - outflows
3
Q
How to know if the BOP is in a deficit
A
Outflows > inflows
4
Q
How to know if the BOP is in a surplus
A
Inflows > outflows
5
Q
What is primary income?
A
Income flows that arise out of cross-border lending and investment
6
Q
What is secondary income (transfers)
A
Transfers occur when money changes hand without any economic transaction taking place
