1. Balance of Payments

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

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

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

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

6. Invisible Trade The trade of services.

7. 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.

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

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

13. 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.

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

15.  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.

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