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abroad minus the same income paid to
– Ex. Payments to American basketball players playing for
European teams minus payments to Manu Ginobli, Yao
Ming, Pau Gasol, Steve Nash and Dirk playing in the U.S. • Net Transfers
Net – Foreign aid, pensions, money sent back home, etc.
– Ex. Mexican migrant workers send money to family in
Mexico. [Mexican workers send $24 billion back to Mexico.] Capital Account [net “debt forgiveness”] & Financial Account [foreign purchase
of U.S. real & financial assets & U.S. purchase of foreign real & financial assets.]
foreign • Balance of Payments – sum of all the transactions that take place
between U.S. residents and the residents of all foreign nations. • There are three components: the Current Account, the Capital/
Financial Account, and the Official Reserves.
The Current Account includes four things:
four • 1. Goods [balance on goods (merchandise)]
Goods • 2. Servic...
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