Balance of Payments Presentation
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Balance of Payments Presentation Transcript:
1.Balance of Payments and Balance of Payment Problems
2.Introduction
All governments have to keep a record of their spending. You've probably heard the expression 'balancing the books'.... all that means is that if your spending equals your income then you are in equilibrium. When looking at governments, there are two 'balances' that are important
3.a) The Balance of Trade
the total value of goods and services received and spent by a given country in trade, within a time frame.
4.b) The Balance of Payments
a more precise measure of the total value of goods and services received and spent by a given country.
It focuses on distinct types of credit and debit to give us a clearer picture.
5.The Balance of Payments
6.The Current Account
The current account is where trade in the value of all visible and invisible goods and services are recorded
goods that you can physically touch - they're 'tangible‘ and which cant be touched-”intangible”
Examples include iron, bales of hay, T-shirts and plant pots. Invisible services, on the other hand, tourism or education are examples for intangible
7.The capital account is a record how much has been spent and received on assets that a country naturally has. These are usually geographical or ecological in nature
For countries with huge deposits of natural gas, the capital account would have a lot of activity
8.The Financial Account
The financial account records net flow of investment
if a country has a lot of successful companies abroad that sent their money home, this would be credited to the financial account.
If a government invests in gold, this would be debited from the country's financial account.
9.Surplus
A balance of payments surplus would occur if the balance is greater than zero.
This means that the country has a net inflow of payments.
More payments are coming in to the country for exports, transfers, or investments than are going out.
10.Deficit
a balance of payments deficit would occur if the balance is less than zero.
This means that the country has a net outflow of payments.
More payments are going of the country for imports, transfers, or investments than are coming in.
A current account deficit is when a country's government, businesses and individuals import more goods, services and capital than it exports.
Download
Balance of Payments Presentation Transcript:
1.Balance of Payments and Balance of Payment Problems
2.Introduction
All governments have to keep a record of their spending. You've probably heard the expression 'balancing the books'.... all that means is that if your spending equals your income then you are in equilibrium. When looking at governments, there are two 'balances' that are important
3.a) The Balance of Trade
the total value of goods and services received and spent by a given country in trade, within a time frame.
4.b) The Balance of Payments
a more precise measure of the total value of goods and services received and spent by a given country.
It focuses on distinct types of credit and debit to give us a clearer picture.
5.The Balance of Payments
6.The Current Account
The current account is where trade in the value of all visible and invisible goods and services are recorded
goods that you can physically touch - they're 'tangible‘ and which cant be touched-”intangible”
Examples include iron, bales of hay, T-shirts and plant pots. Invisible services, on the other hand, tourism or education are examples for intangible
7.The capital account is a record how much has been spent and received on assets that a country naturally has. These are usually geographical or ecological in nature
For countries with huge deposits of natural gas, the capital account would have a lot of activity
8.The Financial Account
The financial account records net flow of investment
if a country has a lot of successful companies abroad that sent their money home, this would be credited to the financial account.
If a government invests in gold, this would be debited from the country's financial account.
9.Surplus
A balance of payments surplus would occur if the balance is greater than zero.
This means that the country has a net inflow of payments.
More payments are coming in to the country for exports, transfers, or investments than are going out.
10.Deficit
a balance of payments deficit would occur if the balance is less than zero.
This means that the country has a net outflow of payments.
More payments are going of the country for imports, transfers, or investments than are coming in.
A current account deficit is when a country's government, businesses and individuals import more goods, services and capital than it exports.
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