Balance of Payments

Question 1

Balance of Payments

Answer 1

A record of transactions between the residents of one country and another

Question 2

Current Account

Answer 2

Part of the BoP that records transactions leading to a change in ownership or direct flow of income

Question 3

Capital Account

Answer 3

That part of the BoP records transactions leading to the purchase or sale of assets

Question 4

Balance on Merchandise Trade

Answer 4

Difference between exports and imports

Question 5

Net Services

Answer 5

Difference between total credit and total debit items on net services account

Question 6

Net Income

Answer 6

Difference between total credit and total debit items on net income account

Question 7

Current Transfers

Answer 7

One off transactions not recorded in current account

Question 8

Current Account Surplus

Answer 8

When the total of credit items on Current Account exceed the total of the debit items in the current account

Question 9

Current Account Deficit

Answer 9

The total of the debit items on the current account exceeds the total of the credit items on the current account

Question 10

Balance on the Current Account

Answer 10

Difference between total credit items and total debit items in the current account of BoP

Question 11

International Capital Flows

Answer 11

Flow of financial capital between countries as a result of the sale or purchase of one country’s assets by other countries

Question 12

Capital Inflows

Answer 12

Financial capital flows into a country as a result of a sale of a domestic asset

Question 13

Capital Outflows

Answer 13

Financial capital flows out of a country as the result of a purchase of a foreign asset