balance of payments
- Created by: Fi Alade
- Created on: 04-04-14 13:45
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- The Balance of Payments
- current account
- trade in goods
- trade in services
- income balance
- net income flows from non residents
- interest, profits and dividends on assets owned abroad
- repatriation of earnings from abroad
- net income flows from non residents
- current transfers e.g. UK contribution to EU's CAP
- capital and financial account
- flows of money associated with saving, investment, speculation and currenty stabilisation
- short term capital flows e.g. hot money
- FDI
- portfolio investments in shares and bonds
- reasons for international capital flows
- speculation
- bank to international bank lending
- individuals transferring funds
- Untitled
- flows of money associated with saving, investment, speculation and currenty stabilisation
- imbalances
- surplus
- aritificial lowering of exchange rate e.g. China
- job creation and economic boost
- reduce availability of goods
- resukts in deficits in other countries
- aritificial lowering of exchange rate e.g. China
- deficit
- have to finance borrowing
- risk of defaulting leads to reduction in lending
- large problem if deficit grows faster than GDP
- have to finance borrowing
- surplus
- reasons for changes in current account
- change in exchange rate
- quality of goods
- state of the economy
- current account
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