Balance of payments/Inflation Flashcards
1
Q
What is the balance of payments
A
Record of all transactions that the uk makes with the rest of the world
2
Q
5 parts of B of P
A
- Current account
- Capital account
- Financial account
- Net errors and omissions
- Reserves and related items
3
Q
Current account
A
Net export/imports goods and services
Net income (Investment income from overseas)
Net transfers ( Money sent from abroad usually by family)
4
Q
Capital account
A
Capital transfer (Purchase and sale of fixed assets such as real estate)
5
Q
Financial account
A
Foreign direct investment (Build factories)
Net portfolio investment (Investment in savings and bonds)
Other financial items (“Hot money”)
6
Q
Net error and omissions
A
Missing data such as illegal transfers
7
Q
Reserves and related items
A
Changes in official monetary reserves including gold and foreign exchange reserves
