Unit 4.6 · Balance of Payments
Components of the Balance of Payments
AO2
Syllabus Requirement
Explains the current, capital, and financial accounts, including trade in goods/services, income, transfers, FDI, portfolio flows, and reserve assets.
Assessment Objectives
AO2Application and Analysis
Summary
The balance of payments records all international transactions for an economy, organized into three main accounts: the current account, the capital account, and the financial account. Understanding these components is essential for analyzing a country's economic interactions with the rest of the world.