Balance of payments

• What is the balance of payments?

  A record of international payments over the course of a year
• What is the trade in goods balance?

  The value of goods exported - the value of goods imported
• What is the trade in services balance?

  The value of services exported - value of services imported
• What is the balance of trade?

  The trade in goods balance + the trade in services balance
• What is the primary balance?

  Earnings of foreign investments - payments made to foreigners
• What is the secondary balance?

  The transfers in the form of money or goods and services
• What is the current account?

  The balance of trade + the primary balance + the secondary balance
• What is a current account surplus?

  When a country's current account is positive
• What is a current account deficit?

  When a country's current account is negative
• What are the two main causes of a current account surplus?

  There is a low rate of inflation relative to other countries, and there are low wage costs relative to other countries
• What are the two main causes of a current account deficit?

  There is a high rate of inflation relative to other countries, and there are high wage costs relative to other countries
• What are global supply chains?

  Worldwide networks of companies and their suppliers