Balance of payments 0.0 / 5 ? EconomicsBalance of paymentsASEdexcel Created by: Katie PriceCreated on: 23-03-15 16:24 What does the Balance of Payments record? All financial transactions between UK and rest of the world 1 of 11 What does the current account record? 1. exports and imports of goods and services 2. Primary and secondary income 2 of 11 what does the balance of trade record? Imports and exports 3 of 11 what does it mean if the balance of trade is in the red? There is a trade deficit 4 of 11 Give two reasons why exports are so important 1. injection = AD increase. 2. increase jobs 5 of 11 give two reasons why UK imports so much 1. We can't produce them 2. better quality than UK goods 6 of 11 what protectionist measures can be put in place? tarrifs, quotas, tax breaks embargos 7 of 11 How can monetry policy improve balance of payments? decrease intrest rates. so less demand for pound so exchange rates down. exports seem cheap so more. imports seem expensive so less. 8 of 11 How can supply side policies improve balance of trade? export promotion, education and training 9 of 11 what is hot money? people put money in countries with high intrest rates increasing demand for it. 10 of 11 if you decrease intrest rates what will happen to the balance of trade less hot money so less demand for pound, so exchange rate drop. so more exports less imports. = better balnce of trade 11 of 11
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