Balance of Payments Flashcards
1
Q
what is balance of payments?
A
Records money flows in and out of a country over a time period
2
Q
What is in the current account?
A
Trade Balance+ Investment Income Balance+ Transfers Balance+ Remittances
3
Q
what is in the capital account?
A
Short Term Capital flows+ Long Term Capital flows
4
Q
what does hot money follow?
A
High interest rates
5
Q
How can you improve Balance of Payments
A
Increase interest rates, import substitution, improve productivity, deregulation, protectionism
