- record of all financial dealings
- split into current account & capital account
- trade in goods (visible trade) e.g. manufactured goods, semi-finished etc.
- trade in services (invisible trade) e.g. financial/ransport services, tourism etc.
- short term money flows: money is moved from country to country in hope of making profit
- long term money flows: associated with long terms saving and investment e.g. foreign companies mayy choose to invest in UK by building a new factory/ investing in the London Stock Exchange
THE BALANCE OF…