CHAPTER 36 BALANCE OF PAYMENTS

Question 1

Balance of payments account

Answer 1

A record of all financial dealings over a period of time between economic agents of one country and all other countries

Question 2

Balance of trade

Answer 2

The value of visible exports minus the value of visible imports

Question 3

Capital and financial accounts

Answer 3

That part of the balance payments account where flows of savings, investments and currency are recorded.

Question 4

Current account

Answer 4

The part of the balance of payments account where payments for the purchase and sale of goods and services are recorded

Question 5

Current balance

Answer 5

The difference between the value of total exports (visible and invisible) and total imports

Question 6

Current accounts deficit or surplus

Answer 6

A deficit exists when imports are greater than exports; a surplus exists when exports are greater than imports

Question 7

Invisibles

Answer 7

Trade in services, transfers of income and other payments or receipts

Question 8

Visibles

Answer 8

Trade in goods