Macro 4 Flashcards
What is BOP?
a record of a country’s trade and transactions with the rest of the world.
What is BOP made up of ?
It is made up of the current account and the capital and financial accounts.
What does BOP record?
The flow of money in and out of a country
How to calculate BOP?
(X-M) ( exports - imports)
What is primary income ?
Interest, profits and dividends
What is secondary income ?
Foreign aid, gift flows
What is the current balance?
The difference between the value of exports and total imports.
What is a current account surplus ?
where there is more income flowing in then out`
What is a current account deficit ?
where there is more income flowing out then in
What are Visible goods?
These are physical tangible goods
Who are visible goods sold to?
sold to foreigners
Where are visible goods bought from ?
domestic residents from foreigners.
