BOP_and_FDI - Balance of Payments and Foreign Direct...

Info iconThis preview shows pages 1–3. 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
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Balance of Payments and Foreign Direct Investment Balance of Payments- The Balance of Payments (BOP) accounts for a country's international transactions for a period of time, typically a calendar year.- The BOP includes:- The current account- The capital/Fnancial account BOP Accounting- Double entry system so each (+) transaction has a balancing (-) transaction. Also each current account entry is offset by a Fnancial account entry. So, overall the account should be in balance.- Positive (+) transactions on current account result from receipt of payment from foreigners- Merchandise exports- Transportation and travel receipts- Income received from investments abroad- Gifts received from foreign residents- Aid received from foreign governments BOP Accounting continued- Negative transactions (-) on current account involve payments to foreigners- Merchandise imports- Transportation and travel expenditures- Income paid on investments of foreigners- Gifts to foreign residents- Aid given by home government- Overseas investments by home country residents Example entries: U.S. Balance of Payments Current Account- $20,000 car import from Japan + $1.5 million factory export to India- 200 billion imports from China...
View Full Document

Page1 / 5

BOP_and_FDI - Balance of Payments and Foreign Direct...

This preview shows document pages 1 - 3. Sign up to view the full document.

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