int trade- balance of payments

the balance of payments def

a record of a country’s trades history with the rest of the world- goods, services, and financial assets

the balance of payments- 6 main accounts

1. merchandise/ goods

2. services

3. investment income

4. unilateral transfers

5. current acc balance

6. capital account

the balance of payments- last 3 accs

1. statistical discrepancy

2. capital account balance and statistical discrepancy

3. balance

outflows or imports

debit

(left side)

inflows or exports

credits

(left side)

what are more imports called and more imports

more imports= unfavorable

more exports= favorable

not necessarily true

investment income acc

foreigners making income from u.s investments

unilateral transfers

foreigners working and making money and either sending it to there familys in the u.s or to there familys outside the u.s

current acc balance

adding up all the balances (far right side) up

- = called unfavorable

+ = called favorable

capital account

financial capital so stocks, bonds, etc

ex- selling capital to foreign countries

im- cap from other countires

capital account balance and statistical discrepancy

this acc is made to balance out the Dr and CR

this adds to the current balance account so if its -490 this acc will add 490 to get the main balance at end to 0.0

statistical discrepancy

DR and CR should balance

but norm dont this is the difference

quota def

a limit on the quantity of imported goods

benfits the gov gets for tariff instead of quota

tax revenue

fixed exchange rate

one that floats so the market determines but then the gov manipulates it so controlled by the gov

floating exchange rate

prices of currency are determined by the market