Theme 2 Unit 36 BoP - Current Account Flashcards
1
Q
Balance of Payments
A
Record of numerous ways in which economy’s are connected. (Payments received, payments abroad, …)
—> BoP refers to the connections of an economy.
2
Q
2 components of BoP
A
- current account
- capital and financial accounts
3
Q
Current Account
A
The part of the BoP account where payments for the purchase and sale of goods and services are recorded.
—> X-M
4
Q
Components of current account
A
- Trade in goods
- Trade in services
- Primary and secondary income
5
Q
The current balance
A
Diff btw the value of exports and total imports.
6
Q
Current account surplus
A
Exports are greater than imports
7
Q
Current account deficit
A
Imports are greater than exports.
8
Q
Capital and financial accounts
A
Part of the BoP account where flows and savings, investment and currency are recorded.
9
Q
Invisibles
A
Trade in services, transfers of income, and other payments or receipts.
10
Q
Visibles
A
Trade in goods
