LEC II - THE BALANCE OF PAYMENTS

LEC II - THE BALANCE OF PAYMENTS - TH E BAL ANCE OF PAYM...

Info iconThis preview shows pages 1–5. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: TH E BAL ANCE OF PAYM ENTS The Balance of Payments The balance of payments summarizes all the transactions by residents, firms and government of one country with the rest of the world. The balance of payments involves double-entry bookkeeping. All transactions enter the balance of payments twice - once as a credit and once as a debit. The receipt of payment from foreigners - a capital inflow is credited. (+) The making of payments to foreigners - a capital outflow is debited. (-) The Balance of Payments All international transactions are classified into the following three categories A. Current Account B. Capital Account C. Official Settlements Account Recor ding Balance of Payments T r ansactions Cur r ent Account Capital Inflows (+) Capital Outflows (-) Exports of goods/services Imports of goods/services Income earned on U.S assets Income to foreigners on their abroad U.S assets Foreign tourists in U.S American tourists abroad Receipt of unilateral Payment of unilateral transfers transfers Recor ding Balance of Payments...
View Full Document

Page1 / 9

LEC II - THE BALANCE OF PAYMENTS - TH E BAL ANCE OF PAYM...

This preview shows document pages 1 - 5. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online