Tom Keagle 70-101 – Ramirez HOMEWORK # 4 Chapter 4 - Review 1,3 Analysis 6,8 1. Balance of trade differs from balance of payments because balance of trade refers to the value of all products a country exports minus the value of the country's imports while the balance of payments refers to the flow of money into and out of a country. The difference is that balance of payments, while it does refer to the money corresponding to the imports and exports of the country, it also accounts for other factors including money spent by tourists in a country, money spent by a country on foreign-aid programs, and the buying and selling currency on international markets. Balance of trade only deals with the imports and exports. 3. The country's economic system affects the decisions of foreign firms interested in doing business there because the deciding firm has to know to what extent the government is involved in the given industry. The company will want to know how much involvement the government has on their
This is the end of the preview. Sign up
access the rest of the document.