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CHAPTER 8 - Coggle Diagram
CHAPTER 8
Balance of payment
International transactions are classified as credits or debits
crebit transactions
debit transactions
BoP structure
The Capital Account (KA)
The Financial Account (FA)
The Current Account (CA)
Goods and services
Income
Unilateral transfers
The Net Errors and Omissions account (EO)
Balance of Payment: BP = CA + KA + FA +OE
Trade Balance
Ex - Im + Net income = Invisible Trade Balance
Ex - Im = Nx or Visible Trade Balance
Macroeconomics policy in open economy
Assume
small open economy
perfect capital economy
Mudell - Flemming model is an extension of IS-LM model for open economy is called IS-LM-BP model