3.2

Balance of Trade

Balance of Trade

Export-Import

Trade Surplus

E>I

Trade Deficit

E<I

Balance of Payments

E-I+net income

BOP other equation

Current accounts+ Capital accounts+ Financial account

Net income examples

Foreign investments, tourism, aid, and military expenses

Favorable balance

more money go into country

Dumping

sell product in another country for cheaper than where its made in

Goal of BOP

Achieve equilibrium