Balance of payments: Difference between revisions
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The balance of payments is an accounting statement of the transactions of a country the rest of the world. The '''current account of the balance of payments''' is made up of the '''visible balance''', consisting of exports minus imports, and the '''invisible balance''' consisting of income less expenditure for services (such as banking, insurance, shipping and tourism) plus profits and interest from abroad. The '''capital account of the balance of payments''' is the net financial inflow from incoming investments from overseas and outgoing overseas investment by domestic investors, together with the net inflow of international grants and loans. By definition, | The balance of payments is an accounting statement of the transactions of a country the rest of the world. The '''current account of the balance of payments''' is made up of the '''visible balance''', consisting of exports minus imports, and the '''invisible balance''' consisting of income less expenditure for services (such as banking, insurance, shipping and tourism) plus profits and interest from abroad. The '''capital account of the balance of payments''' is the net financial inflow from incoming investments from overseas and outgoing overseas investment by domestic investors, together with the net inflow of international grants and loans. By definition, a current account outflow is always balanced by an equal capital account inflow, and vice versa. | ||
See also [[International Economics]]. | See also [[International Economics]]. | ||
Revision as of 08:44, 8 January 2008
The balance of payments is an accounting statement of the transactions of a country the rest of the world. The current account of the balance of payments is made up of the visible balance, consisting of exports minus imports, and the invisible balance consisting of income less expenditure for services (such as banking, insurance, shipping and tourism) plus profits and interest from abroad. The capital account of the balance of payments is the net financial inflow from incoming investments from overseas and outgoing overseas investment by domestic investors, together with the net inflow of international grants and loans. By definition, a current account outflow is always balanced by an equal capital account inflow, and vice versa.
See also International Economics.