1. Balance of Payments Records New Zealand's international transactions with the rest of the world International transactions include the value of – Inflows and outflows of money – Financial assets and liabilities

2. Balance of Payments Financial Account Capital Account Current Account

3. 1 st part to the current account Balance on goods Measures relationship between nations exports and imports of GOODS. Calculated as Export receipts – Import Payments Exports of goods Export receipts Imports of Goods Import Payments

4. 2 nd part to the current account Balance on services We sell our services overseas and we buy other services from overseas. They include tourism, insurance and transport. Calculated as services receipts – service payments Exports of services Export receipts Import payments Import of Services

5. Balance on Goods + Balance on services = Balance on Trade If we have more export receipts than import payments the balance on trade will have a surplus If we have more import payments than export receipts then the balance on trade will have a deficit

6. Workbooks page 69-70