Chapter 02

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Unformatted text preview: CHAPTER 2 International Flow of Funds 1 Chapter Overview A. Balance of Payments B. International Trade Flows C. International Trade Issues D. Factors Affecting International Trade Flows E. Correcting a Balance of Trade Deficit F. International Capital Flows G. Agencies That Facilitate International Flows 2 Chapter 2 Objectives This chapter will: A. Explain the key components of the balance of payment B. Explain how international trade flows are influenced by economic factors and other factors C. Explain how international capital flows are influenced by country characteristics 3 A. Balance of Payments 1. Current Account: a. Payments for merchandise and services b. Factor income payments c. Transfer payments 4 A. Balance of Payments 2. Capital and Financial Accounts a. Direct foreign investment (DFI) b. Portfolio investment c. Other d. Errors and Omissions and Reserves 5 B. International Trade Flows 1. Distribution of U.S. Exports and Imports 2. U.S. Balance of Trade (BOT) Trend 3. Should the U.S. be Conc...
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