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

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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 pl
ace
over
a
spe cif
ic
peri
od
of
ti
me
be t
w een
a count
ry and
the
rest
of
the
w or
ld.
o The bal
ance
o f
payme nt
s st
ateme nt
i
s used
by t
he gover
n ment
in
ada pt
ing
it
s
monetary
an d f
isc
a l
pol
ici
es
a s
it
i
nfor
ms
the gover
nme nt
of
the
country'
s i
n t
ernat
ional
posi
ti
oning.
Cur
rent
Account
:
(net
­once
a year
)
o The
net
Trade
in
g oods
and
ser
vices
w hi
ch
takes
int
o consi
der
ati
on
Income
fl
ows
and
Cur
rent
t
ransf
ers.
Capi
tal
account
:
(one
off
st
ock)
o The
net
migrat
ion
tr
ansf
er
of
funds
and
sal
e of
a sset
s and
li
abi
li
ti
es
along
w i
th
t
ransf
er
of
EU funds
and
for
eign
aid
payment
s.
Fi
nanci
al
Account
:
(net
­once
a year
)
o The
net
U K
invest
me nt
over
seas,
i
t
compri
ses of
FDI,
Hot
Mo ney,
Por
tf
oli
o
i
nvest
me nt
(
stocks
and shar
es)
and
Int
ergover
nme nt
al
loans
.
Net
er
ror
s/
omi
ssi
ons:
o The
income
recei
ved
but
not
yet
al
locat
ed
to
anyt
hing.
Facts
o The UK
current
account
i
n t
he t
rade
of
goods
has been
negati
ve si
nce 1986
due t
o a
depend ency
on i
mp or
ts
that
has
been cr
eat
ed si
nce t
he expansi
on
o f
t
he t
ert
iar
y
sect
or.

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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.…read more

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 ear
ns more.…read more

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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 ,
dur
a bl
e goods.…read more

Comments

davidsalter

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

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