Balance of Payments and Exchange Rate

Vocabulary flashcards covering key definitions and purpose of the Balance of Payments from Chapter 15.

Balance of Payments

A systematic record of all economic transactions between the residents of one country and residents of foreign countries during a given period of time, usually one year.

Main Purpose of Balance of Payments Accounting

To provide information to the government and other relevant agencies about the international position of trade and capital flows of the country.

Economic Transactions

Flows of economic goods, services, and assets, which normally involve a payment and receipt of money in exchange for these flows.

Transfer Payments

Economic flows that take place without any payment, such as gifts from abroad.