Ch 5 Global Trade [AP & Reg]

805 0 current account something is physically

Info iconThis preview shows page 1. Sign up to view the full content.

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

Unformatted text preview: inancial assets). – Notice that the two transactions offset each other. the Theoretically, the balance payments should always equal zero…Theoretically equal IN OUT • Lucky for you, in AP Macroeconomics we only worry about the 1st half of the worry transaction. We simplify and see the transaction export of farm equipment as a credit export (inflow of $) to the current account. (inflow • Why then, did I mention double entry bookkeeping? – To help you understand that the current account and capital/financial account account are intrinsically linked together and and help balance each other? balance – Yes, that’s it! • Balance of Trade or Net Exports – Exports of Goods/Services – Import of Goods/Services – Exports create a credit to the balance of payments credit – Imports create a debit to the balance of payments debit • Net Investment Income [Interest, dividend, & profit income] [Interest, et nvestment – Interest, dividend, and profit income earned by America...
View Full Document

This note was uploaded on 07/20/2012 for the course ECON 2106 at GCSU.

Ask a homework question - tutors are online