week 12

Question 1

The balance of payments

Answer 1

• record of all the transactions made between the residents of one country with the residents of all other coutnries

Question 2

current account

Answer 2

• transfer of goods and services
• transfer of income
• exports minus imports
• net income
• current transfers
• net exports

Question 3

financial account

Answer 3

• records purchases of real assets and financial assets that a country has made abroad and foreign purchases of real and financial assets in the country

Question 4

foreign investment

Answer 4

• long term capital investment
• foreigners into australia -> capital inflow and credit
• investing overseas, capital outflow and is a debit

Question 5

portfolio investment

Answer 5

• purchase of shares and bonds

- CA

Question 6

reserve account

Answer 6

• operated by nations central bank to buy and sell foreign currencies

Question 7

international lending

Answer 7

equivalent to buying either a real or financial asset

Question 8

international borrowing

Answer 8

• equivalent to selling a real financial asset