1
Q
What is Balance of Payment?
A
BoP is a record of all financial transactions between a country and the rest of the world.
2
Q
What are the 2 main sectors?
A
Current account and Capital and financial
3
Q
What is the current account?
A
Built from 4 sections ( trade in goods & services, investment in income, current transfer)
It records the net income that an economy gains from international transactions
4
Q
What is the financial and capital account?
A
Tracks investment, If current account in deficit it will be the opposite (viseversa)
If financial account in surplus then we are purchasing assets abroad
