Balance of payments

Question 1

What is balance of payments ?

Answer 1

Record all financial interactions between consumers, firms and other countries from one country to anothe.
r
States how much is spent on imports and also exports of exports

Question 2

What are imports ?

Answer 2

Goods and services bought from a foreign country (negative in the balance of payment)Outflow of money
Goods and services sold to a foreign country (positive in the balance of payments )Inflow of money

Question 3

What is a balance of payment made up of?

Answer 3

The current account
The capital account
The official financing account

Question 4

Current account on balance of payment

Answer 4

Balance of trade in goods and services
Current account surplus -there is an net inflow of money into the circular flow income.Uk surplus of services , the deficit with goods
Current account deficit -the net outflow of money into the circular flow. Uk spends more on imports from other countries than exports.
If deficit is large and for a long period of time it will be hard funding it .

Question 5

Factors that influence a country’s current account balance

Answer 5

By selling more exports -Uk has a greater inflow of money
Improves AD and economic growth

Question 6

explain why countries import and export goods and services and the benefits
of this for consumers and producers?

Answer 6

International trade raises living standards ,providing employment,enabling consum