Balance Of Payments

Question 1

Definition Of Balance Of Payments

Answer 1

A record of all economic transactions between a country and the rest of the world over a specified period.

Question 2

Definition Of Current Account

Answer 2

Records for payments of imports and exports of goods and services.

Question 3

Definition Of Financial And Capital Account

Answer 3

Records savings, investments and speculative flows of money.

Question 4

Definition Of Primary Income

Answer 4

The loans from factors of production abroad.

Question 5

Definition Of Secondary Income

Answer 5

Range of mainly government transfers to and from overseas organisations (I.e. the EU).

Question 6

Definition Of Current Account Deficit

Answer 6

When imports exceed exports.

Question 7

Definition Of Current Account Surplus

Answer 7

When exports exceed imports.

Question 8

Reasons For Current Account Deficit Increasing (4)

Answer 8

Globalisation (countries become more interconnected)
Population increase
Covid (exports decline)
Brexit (businesses uncertain of trading terms = businesses go away).