Balance of Payments. Definition  A record of all transactions leading to international trade.

Slides:

Advertisements

Similar presentations

Balance of Payments Contents Introduction Components of balance of Payments.

Advertisements

Unit: International Trade Topic: Balance of Payments and the Foreign Exchange Market.

CHAPTER 15 ECONOMICS 3: International Trade. 2 R. Delaney Foreign or International Trade Foreign trade (or international trade) means selling goods and.

26 THE EXCHANGE RATE AND THE BALANCE OF PAYMENTS.

Ch. 9: The Exchange Rate and the Balance of Payments.

Ch. 9: The Exchange Rate and the Balance of Payments.

5.A Balance of Payments (

FIN 40500: International Finance Nominal Rigidities and Exchange Rate Volatility.

The International Balance of Payments

© Pearson Education Canada, 2003 INTERNATIONAL FINANCE 34 CHAPTER.

The Balance of Payments: Linking the United States to the International Economy The Current Account Trade Flows for the United States and Japan, 2006.

Principles & Policies I: Macroeconomics

Chapter 15 International and Balance of Payments Issues.

Open Economy & Exchange Rate ECO 120 Macroeconomics Week 13 Lecturer

1 Foreign Exchange Foreign Exchange Foreign Exchange Foreign money, including paper money and bank deposits that are denominated in foreign currency Foreign.

International Trade. Exports & imports Exports = goods & services sold to another country. Imports = goods bought from another country.

Exchange Rates and the Open Economy Chapter 18. Foreign Exchange Market Abbreviation: FOREX Over a trillion dollars worth are traded daily. Most trading.

Chapter 36: International Finance McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. 13e.

C hapter 32 Exchange Rates, Balance of Payments, and International Debt © 2002 South-Western.

Looking at the flow of money in and out of countries around the world.

Balance of Payments “A useful way to think about the balance of payments is that it is an account that records purchases and sales of sterling by those.

External Sector Econ 102 _2015. External Sector How is a country linked with other countries in the global world? 1)There are exchange of Goods and Services.

INTERNATIONAL FINANCE 18 CHAPTER. Objectives After studying this chapter, you will able to  Explain how international trade is financed  Describe a.

INTERNATIONAL TRADE LEARNING OUTCOME 8. THE BENEFITS OF TRADE Absolute Advantage Comparative Advantage Economies of Large Scale When a country can produce.

International Political Economy. Open Economies and its mechanisms Lesson 3 Section 3.1.

Lecture # 5 Role of Central Banks. Role of Central bank Monitoring Provide guide lines.

Balance of payments What is the price of a country’s currency?

External Sector Econ 102 _2013. External Sector How is a country linked with other countries in the global world? 1)There are exchange of Goods and Services.

BALANCE OF PAYMENTS PROBLEMS. Current Account Deficit Current Account Deficit= net outflows on current account greater than net inflows. Made up on the.

Unit-5 Macro Review Foreign Exchange & Balance of Payments.

BALANCE OF PAYMENT by Shalini. Trade: Exchange of goods and services with other nations. Export Goods and services sold to other countries Import Goods.

Exchange Rates, the Balance of Payments, & Trade Deficits Chapter 21 10/5/

IGCSE®/O Level Economics

International Trade. Balance of Payments The Balance of Payments is a record of a country’s transactions with the rest of the world. The B of P consists.

Balance of Payments : When American citizens and firms exchange goods and services with foreign consumers and firms, payments are sent back and forth through.

Types of trade  Getting started P160 i. Visible trade = international trade in goods → balance of trade or visible balance = visible exports (X) – visible.

10/13/20151 Outline 2: The Balance of Trade, Balance of Payments (BOP) and International Macroeconomics 2.1 Introduction to the Balance of Trade and Payments.

‘Strong’ vs. ‘Weak’ Currency Exchange Rates: The price at which currency can be bought and sold.

1. Definitions The balance of payments is a form of state book keeping, where monetary inflows and outflows are recorded The number of transaction depends.

Chapter 5: Foreign Exchange Markets and the Balance of Payments

Trade Barriers Quotas Sanctions Tariffs Subsidies.

Chapter 12 International Linkages Introduction National economies are becoming more closely interrelated Economic influences from abroad have effects.

 The balance of payments is an accounting record of the money value of trade (goods and services) between Australia and the rest of the world.  Money.

Balance of Payments 4.5. Current Account The Balance of Payment is a record of all in – and outflows in a country arising from economic activity in the.

International Business Basics

Eco 200 – Principles of Macroeconomics Chapter 7: Foreign Exchange Markets and the Balance of Payments.

Balance of payment. Definition of Balance of Payment Balance of Payments (BoP) statistics systematically summaries the economic transactions of an economy.

1 © ©1999 South-Western College Publishing PowerPoint Slides prepared by Ken Long Principles of Economics 2nd edition by Fred M Gottheil.

Balance of Payments A measure of the transactions between United Kingdom residents and the rest of the world.

2.13 The Balance of Payments on Current Account Why do countries trade with each other?

Balance of Payment ARVIND KUMAR PAREEK K.V. NO. 5 II SHIFT JAIPUR.

Unit-5 Macro Review Phillips Curve, Balance of Payments & Foreign Exchange.

36-1 International Finance  Each country has its own currency (except in Europe, where many countries have adopted the euro).  International trade therefore.

International Business Basics 3-1. Trading Among Nations Domestic Business International Business (Foreign or world trade) Making, buying, and selling.

19 The World of International Finance. HOW EXCHANGE RATES ARE DETERMINED What Are Exchange Rates? exchange rate The price at which currencies trade for.

Balance of Payments What is the balance of payments The balance of payments is a record of all economic transactions between the residents of a country.

Unit 2 Glossary. Macroeconomics The study of issues that effect economies as a whole.

External Sector Econ External Sector How is a country linked with other countries in the global world? 1)There are exchange of Goods and Services.

Copyright 2008 The McGraw-Hill Companies 36-1 Financing International Trade Capital and Financial Account Flexible Exchange Rates Fixed Exchange Rates.

BALANCE OF PAYMENT & EXCHANGE RATE

Principles of Economics 2nd edition by Fred M Gottheil

Balance of Payments.

Why would a country have a current account deficit or surplus?

Why would a country have a current account deficit or surplus?

Eco 200 – Principles of Macroeconomics

Measuring the Value of Trade

The Balance of Trade and Balance of Payments

Balance of Payments & Exchange Rates

LEARNING OBJECTIVES To KNOW the different accounts contained within a countries balance of payments. To UNDERSTAND the causes and problems of a current.

Open-Economy Macroeconomics: Basic Concepts

Presentation transcript:

Balance of Payments

Definition  A record of all transactions leading to international trade.

 Exports- Goods and services sold abroad.  Imports- Goods and services bought abroad.

Visible Trade  The trade of physical goods.  Balance of Trade- The difference between visible exports and visible imports.

Busiest ports in the world 1. Shanghai 2. Singapore 3. Hong Kong 4. Shenzen 5. Busan 6. Ningbo-Zoushan 7. Guangzhou 8. Quingdao

Invisible Trade The trade of services.

Balance of Payments  The current account- The part of the balance of payments where all of the imports and exports are recorded.  It includes both visible and invisible trade.

Current Account Goods Services Income Current transfers- currency received with nothing received as a return.

Capital Account  Records the flow of money into and out of a country from transactions resulting to savings, investment and speculation.

The effects of a current account deficit  An increase in external debt.  A rise in unemployment  Downward pressure on the exchange rate.  Structural weakness- lack of investment.

The effects of a current account surplus  Rising employment rates.  Foreign currency reserves  Domestic shortages if too many goods are sold abroad.

 A rising exchange rate will raise the price of exports which may affect demand in the future.  A country with very high surplus means other countries will have a deficit. This could lead to international instability.

The Government  Governments prefer an equal balance of payments.  They may take steps to ensure this.  Import Tariffs  Devaluing Currency