Unit 4: balance of payments

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4 Terms

1
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which accounts are used in the balance of payments

  1. current account
  2. capital account
  3. financial account
2
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what is included in the current account

  • balance of trade in goods
  • balance of trade in services
  • income
  • current transfers
3
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what is included in the capital account

  • capital transfers (ownership of an asset (other than cash or inventories) is transferred from one institutional unit to another)
  • transaction in non- produced, non- financial assets (natural resources contracts, leases and licences as well as goodwill and marketing assets.)
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what is included in the financial account

  • foreign direct investment (FDI)
  • portfolio investment (stake in an asset bought with the expectation that it will provide income or grow in value)
  • reserve assets
  • official borrowing