Cards (48)

    • What is the balance of payments defined as?
      Country's transactions with the world
    • What does the current account record in the balance of payments?
      Net trade and income
    • The current account, capital account, and financial account must always sum to zero in the balance of payments.
      True
    • The capital account records net capital transfers and the acquisition/disposal of non-produced, non-financial assets
    • The balance of payments must always balance, meaning the sum of the current account, capital account, and financial account must equal zero.
      True
    • What does the capital account primarily focus on?
      Ownership transfers of assets
    • What is included in the income balance of the current account?
      Overseas investment income
    • The current account records net trade in goods, services, income, and current transfers
    • The Current Account records net trade in goods and services
    • What does the Current Account primarily focus on?
      Trade-related activities
    • The Capital Account covers income from wages and profits.
      False
    • The Trade Balance is the difference between exports and imports of goods
    • Order the components of the Current Account based on their definitions:
      1️⃣ Trade Balance: Difference between exports and imports of goods
      2️⃣ Services Balance: Difference between exports and imports of services
      3️⃣ Income Balance: Net income from wages, profits, and investments
      4️⃣ Current Transfers: Unilateral payments without goods or services exchanged
    • Direct investment involves foreign ownership or control of business operations
    • Capital flows affect a country's economic stability and growth.

      True
    • What does the Financial Account record?
      Net acquisition and disposal of financial assets and liabilities
    • What is the primary function of the balance of payments?
      Record transactions
    • The current account records the net trade in goods and services
    • Match the component of the balance of payments with its description:
      Current Account ↔️ Net trade and income
      Capital Account ↔️ Net capital transfers
      Financial Account ↔️ Financial asset transactions
    • What does the current account primarily focus on?
      Trade-related activities
    • The trade balance is the difference between exports and imports of goods
    • A positive current account balance indicates more money flowing into the country than out.

      True
    • What is the balance of payments?
      Record of transactions
    • The balance of payments must always sum to zero.
      True
    • The Capital Account includes net capital transfers and disposal of non-produced, non-financial assets
    • What are the four main components of the Current Account?
      Trade balance, services balance, income balance, current transfers
    • A positive current account balance indicates more money flowing out of the country.
      False
    • What are the three components of the Capital Account?
      Direct investment, portfolio investment, official reserves
    • The balance of payments must always balance to zero
    • Each transaction in the balance of payments affects the specific component it falls under.

      True
    • The balance of payments must always balance, with the current account, capital account, and financial account summing to zero
    • The Capital Account records net trade in goods and services.
      False
    • The Current Account focuses on trade and income, while the Capital Account covers transfers of ownership and non-produced assets.
      True
    • The Trade Balance is the difference between exports and imports
    • What are the three components of the Capital Account?
      Direct, portfolio, official
    • The balance of payments must always balance because every transaction has a corresponding inflow and outflow
    • Match the balance of payments component with its definition:
      Current Account ↔️ Net trade in goods and services
      Capital Account ↔️ Net capital transfers
      Financial Account ↔️ Net acquisition of financial assets
    • What is the impact of debt forgiveness on the capital account?
      Increases surplus
    • How does a country finance a current account deficit?
      Borrowing or investment inflows
    • Match the account with its focus:
      Current Account ↔️ Trade and income
      Capital Account ↔️ Ownership and non-produced assets