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A country’s balance of payments is a record of all the economic transactions between residents of that country and residents in other countries.
Money coming into the country creates credit items, which have a positive sign.
Money going out of the country gives rise to debit items which have a negative sign.
The components of the balance of payments are
The current account
The capital account
The financial account
Equilibrium in the balance of payments
A balance of payments is in equilibrium if, over a period of years, the exchange rate remains stable and autonomous credits and debits are equal in value (the annual trade in goods and services is in overall balance).
Economics notes on
The balance of payments
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