National income accounting and the balance of payments - The Balance of Payments Accounts
3 important questions on National income accounting and the balance of payments - The Balance of Payments Accounts
Three types of international transactions
1) Transactions that arise from the export or import and therefore enter directly into the current account
2) Transactions that arise from the purchase or sale of financial assets. (found n the financial account)
3). Other activities resulting in transfers of wealth between countries are in the capital account.
2) Transactions that arise from the purchase or sale of financial assets. (found n the financial account)
3). Other activities resulting in transfers of wealth between countries are in the capital account.
Rule of double-entry bookkeeping:
Every international transaction automatically enters the balance of payments twice, once as a credit and once as a debit.
Official international reserves
Foreign assets held by central banks as a cushion against national economic misfortune.
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