Balance of Payments Flashcards
1
Q
Balance of Payments (BoP)
A
- sum of all transactions that take place between a country’s residents and the residents of all foreign nations
2
Q
credits
A
- cash inflows
3
Q
debits
A
- cash outflows
4
Q
current account (CUR)
A
- reflects payments arising from trade in goods and services and income flows due to foreign investment
5
Q
balance of trade (merchandise account) (BoT)
A
- value of exported goods minus value of imported goods
6
Q
balance on services (BoS) or service account
A
- value of exported services minus value of imported services
7
Q
net foreign investment income (NFII)
A
- profits, dividends and interest accruing to residents of country X due to investment abroad minus profits, dividends, and interest accruing to foreigners due to investment in country X
8
Q
capital account (CAP)
A
- reflects payments arising from non=resident purchases of assets
9
Q
short-term capital flows (STCF)
A
- highly liquid assets; volatile, sensitive to short-term interest rate changes
10
Q
long-term capital flows (LTCF)
A
- more permanent investments
11
Q
Changes in Official International Reserves (OIR)
A
- OIR are holdings of foreign currencies or, historically, precious metals by central banks
