Economics Unit 4- Balance of Payments (full topic notes)

This is a compilation of all my class notes, text book notes, revision guide notes and some notes I found on get revising.  Hope it helps good luck in the Summer!! :D 

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  • Created by: Preeya
  • Created on: 10-04-12 18:44

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Page 1

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By Preeya Soni




Definitions
Facts
Balance of Payments disequilibria
Economic benefits of a weak currency
Causes of a trade deficit

Definitions:
Bal
ance
of
Payment
s:


o Bal
a nce
of
p ayme nt
i
s the
record
of
the economic
and f
inanci
al
fl
ow s
that
take…

Page 2

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By Preeya Soni




o There
ha s
been an expa nsi
on i
n Wo r
ld
T r
ade wit
h a
ti
lt
t
ow ar
ds t
he East.

o Hot
mo ney f
lows i
nto a
c ountr
y wit
h l
ow i
n…

Page 3

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By Preeya Soni




o More f
orei
gn t
ouri
sts
visi
t
t he
countr
y as
your
currency
is
cheap er
f
or
them so t
hey
can
aff
ord t
he
holi
day,
they get
more
for
t
h ei
r
mo ney
a nd
the UK…

Page 4

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By Preeya Soni






























DEMAND SIDE POLICIES SUPPLY SIDE POLICIES

Money Supply Government Subsidies
Reduce the money supply Less E.g. to improve UK
consumption less A.D fewer imports competitiveness more imports.
more balanced balance of payments. Improve the skill set of workforce
Interest Rates E.g. by attracting immigration.
Increase interest rates…

Page 5

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By Preeya Soni




Balance of Payment and Standard of living
o As peopl
e i
mp or
t
in
the
short
ter
m t
his
serves
as an
incr
ease i
n st
an dar
d of
l
ivi
ng,
as
consume r
s can
buy more househol
d ,…

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davidsalter

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This document goes into the balance of payments in more detail. It includes some diagrams for more visual learners.

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