ch13 (3) - International transactions appear in two places...

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International transactions appear in two places Because they account for the differences between measures of expenditure, product, and income. In the Balance of Payments Accounts Where they are broken down by concept and presented in much more detail. Transactions in goods & services, factor services, and income transfers go in the current account (CA). Transactions in assets are recorded elsewhere. The financial account (FA) records trade in asset. The capital account (KA) records transfers of assets. The national income identity Adding up the three expressions allows us to see how international transactions break the link between income and expenditure: The sum of TB, NFIA and NUT is the difference between expenditure and income. It is called the current account CA. U.S. trends for C, I, and G Consumption (70%), government consumption (15%), and investment (15%). Investment fluctuates more than other components.
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This note was uploaded on 03/02/2012 for the course EC 340 taught by Professor Ballie during the Spring '10 term at Michigan State University.

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ch13 (3) - International transactions appear in two places...

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