a) Balance of payments

a) components of the balance of payments, with particular reference to the current account, and the balance of trade in goods and services

balance of payments = a record of a country’s international transactions

• consists of → current account + financial/capital account

current account = the flow of money around

• the trade balance = revenue from exports - expenditure on imports

• primary income = income transferred from foreign factors of production

• secondary income = income transferred between nations as contributions or aid

measured as a % of GDP

financial and capital account = the flow of money around savings, investments, and currency stabilisation