Balance of payments
 A summary of transactions between domestic and foreign residents for a specific period of time
Two of the main components are :
1. Current account – tracks cashflows between countries due to purchases of goods or services or provision of income on financial assets
 
-
the difference between total imports and
total e&ports is the balance of trade
$ "actor income payments – interest and
dividends
 
-
migrate
assets in foreign countries that can be used to
conduct business
bonds that do not transfer control
*. +ther capital investment – Transactions
market securities
decline as things have become more e&pensive
$ ,ational (ncome – (ncreased consumption of
goods lead to increase in imports
$ -overnment policies – Tariffs' subsidies etc.
$ &change rates – Currency strengthening will
lead to more e&pensive products and reduced
e&ports
barriers
the currency is e&pected to strengthen
 
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$ (nterest rates
$ &change rates