Key Elements of the BOP Flashcards
Calculate the main components of Australia's BOP
What are the two accounts within the BOP?
Current Account
Capital & Financial Account
What are the three accounts within the current account?
Balance on Goods & Services
Net Primary Income
Net Secondary Income
What makes up the capital account?
Capital Transfers
Intellectual Property
What makes up the financial account?
Direct Investment
Portfolio Investment
Financial Derivatives
Other Investment
Reserve Assets
What is the final, minor area on the KAFA?
Net Errors and Omissions
What is the Balance of Payments?
A summary of all transactions between Australia and the rest of the world over a given period
What are inflows referred to as?
Credits
What are outflows referred to as?
Debits
What does the current account cover?
Non-Reversible Transactions
How is the Balance on Goods & Services calculated?
Net Goods + Net Services
What is the Net Primary Income Account?
Covers interest payments on borrowings and returns on other foreign investments
What is the Net Secondary Income Account?
Covers non-market transfers - includes insurance payouts, workers’ remittances and unconditional aid
How can the Balance on the Current Account be calculated?
BOGS + NPY + NSY
What are capital transfers?
For the most part, conditional foreign aid
What are financial derivatives?
Investments whose value is derived from the performance of specific assets, interest or exchange rates
