Balance of payments

Question 1

what is the balance of payments 


Answer 1

a record of all financial transactions made between consumers, business and government in one country with other nations

Question 2

what are the items in the current account of BOP


Answer 2

1)Net trade in balance of goods
2)net trade in balance of services, banking, insurance, health, education
3)net primary income from overseas assets, flow of profits, interest and dividends from overseas investments
4)net secondary income,overseas/debt relief

Question 3

how would a fall in the exchange rate affect AD

Answer 3

make exports cheaper and imports more expensive. This will cause the volume of exports to rise, which would positivley impact aggregate demand