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16 Cards in this Set
- Front
- Back
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The balance of payments account |
A record of the value of all the transactions between the residents of one country and the residents of the rest of the world over a given period of time. |
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A credit item in the balance of payments (i.e. a positive value) |
Any transaction that leads to money entering the country from abroad. |
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A debit item in the balance of payments (i.e. a negative value). |
Any transaction that leads to money leaving the country to go abroad. |
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The current account |
A measure of the flow of funds from trade in goods and services, plus other income flows. |
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The balance of trade in goods |
Revenue received from the export of tangible goods minus expenditure on the import of tangible goods over a given period of time. |
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The balance of trade in services |
Revenue received from the export of services minus the expenditure on the import of services over a given period of time. incl. banking, insurance, tourism etc. |
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Net investment incomes or net factor income from abroad |
A measure of the profit, interest, and dividends moving into and out of the country over a given period of time as a result of financial investment abroad. |
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Current transfers |
A measurement of the net transfers of money (payments made between countries when no goods or services change hands e.g. aid, remittances) |
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Current account balance = |
Balance of trade in goods + balance of trade in services + Net income flows + net transfers. |
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The capital account = |
Capital transfers + Transactions in non-produced, non financial assets. |
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Capital transfers |
A measure of the net monetary movements gained/lost through e.g. transfers of goods and financial assets by migrants, debt forgiveness, transfers relating to the sale of fixed assets, gift taxes, inheritance taxes and death duties. |
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Transactions in non-produced, non-financial assets |
The net international sales and purchases of non-produced assets such as land or the rights to natural resources & the net international sales & purchases of intangible assets e.g. patents, copyrights, brand names or franchises |
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The financial account = |
Direct investment + Portfolio investment + Reserve assets |
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Direct investment |
A measure of the purchase of long-term assets, where the purchaser is aiming to gain a lasting interest in a company in another economy e.g. the buying of property, the purchase of a business or the purchase of the stocks or shares of a business. Much of this activity is FDI. |
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Portfolio investment |
A measure of stock and bond purchases, which do not lead to a lasting interest in a company (also includes saving a/c deposits) |
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Reserve assets |
The reserves of gold and foreign currencies which all countries hold and which are itemized in the official reserve account |
