Balance of payments
The largest component of the balance of primary income is net investment
Net Investment income
The difference between inward and outward flows of investment income
Transfers
Payments made between countries without anything of economic value received in return, foreign aid, grants and private transfers
What is the balance of payments and what is it made up of?
It is a record of a country's transactions with the rest of the world.
The current account
The capital account
The financial account
errors and ommisions
The current account is a measure of how competitive a country is. It is viewed as the most important part of the balance of payments
It is made up of:
The balance of trade in services
The balance of primary income
The balance of trade in goods
The balance of secondary income
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Surpus
Defecit
When inflows are greater than outflows
When outflows are greater than inflows