Balance of payments

• record of all financial dealings
• split into current account & capital account

CURRENT 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.

CAPITAL ACCOUNT

• 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…