This study guide covers the Balance of Payments (BOP), focusing on the current account (goods, services, income flows), capital account (investment flows), and the role of official reserves. It explains how these accounts interact, emphasizing the principle that the current and capital account balances sum to zero. Examples and practice questions illustrate how different transactions impact the BOP and the flow of currency between countries.
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Question 1 of 10
What are the two primary accounts that constitute the Balance of Payments? ๐
Trade and Fiscal Accounts
Current and Capital Accounts
Revenue and Expense Accounts
Asset and Liability Accounts