BoP Flashcards
(5 cards)
1
Q
Current account
A
records transactions relating to trade in goods, trade in services, primary income and secondary income
2
Q
primary income
A
net flow of salaries, interest, profits and dividends generated from UK owned foreign assets
3
Q
Secondary income
A
current transfers such as foreign aid
4
Q
Capital account
A
records financial flows such as net direct investment, portfolio investment and short term flows
5
Q
What is the relationship between the financial and current account
A
A current account deficit must be financed by a surplus in the financial account. This can be through selling bonds in foreign markets.
