Current account

Question 1

Current acount

Answer 1

Measures money values of imports and exports (goods, services)- in a year. (e.g. cars, food, tourism)

Question 2

Trade in goods

Answer 2

Imports and exports of visible goods (e.g. TV, apples, shoes)

Question 3

Trade in services

Answer 3

Imports and exports of invisible goods (e.g. tourism)

Question 4

Primary income/Investment income

Answer 4

Flows of money from international investment income or employment (e.g. dividends, income, interest abroad)

Question 5

Secondary income/Transfers

Answer 5

Any money movements not paying for goods/services or result of investments (e.g. transfers like paying family abroad, international aid)

Question 6

Balance of trade

Answer 6

Refers to trade in goods and services, not primary/secondary incomes. The same as the net trade and net exports

Question 7

Balance of trade surplus

Answer 7

When money from exported goods and services exceeds expenditure on imports (X>M). More money flowing in then out

Question 8

Balance of trade deficit

Answer 8

When more money is spent on imported goods and services than is earned from exports (X<M). More money flowing out than in