Balance of Payments Flashcards
1
Q
Balance of Payments
A
A record of all transactions between one country and the rest of the world.
2
Q
Current account
A
Primarily records the trade in goods (visibles) and services (invisibles).
3
Q
Current transfers
A
Includes overseas aid payments and payments to the EU.
4
Q
Capital account
A
Primarily records international flows of capital such as inter-country loans or government investment overseas.
5
Q
Financial account
A
Records FDI, also includes government owned assets and short term capital flows.
6
Q
FDI
A
The establishment of operations or acquiring tangible assets, including stakes in other businesses located in other countries.
7
Q
Portfolio investment
A
This is the purchase of financial assets e.g. corporate and government bonds, securities, shares in other countries.
