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BOP - P222-232 - Coggle Diagram

- - - - People
      - Firms
      - Government
      - Non for profit organisations
- - - - Export & import of services
      - Export & import of goods
      - Investment income
        
        Export of service of capital
        
        Domestic firm sending dividends to a foreign firm/individual who owns shares in the domestic firm
        
        Import of service capital
        
        A domestic firm or individual gets paid in dividends from a foreign firm due to the domestic firm/individual owning shares
      - Gifts (or unilateral transfers)
        
        Individuals working in a foreign country sending back their wages to their home country
        
        Government foreign aid projects
  - - - Capital inflows are when foreign firm buys a factory, for example, in the domestic market
      - Capital outflow ownership of foreign assets by a country's residents increases
    - - FPI - short term
        
        one year or less investment
        
        Typical investments are bank loans, commercial paper, time deposits etc
      - FPI - long term
        
        More than one year investments
        
        Typical investments are Government bonds, corporate stocks & bonds etc
      - FDI
        
        Foreign firms or individuals buying foreign subsidiaries, foreign factories, international joint ventures etc
  - - - Reserves help intervene in exchange market
  - - - Current account + capital account + official reserves + errors & omissions = 0