EC249 Lecture Notes - Lecture 6: Filipinos, Ushas, None Of The Above
Document Summary
Records real and financial flows between the domestic and foreign countries. Real as in: goods and services, economic activity. Does not matter if you are a part of a common currency; balance of payments exists as long as you are a sovereign nation. Is not a part of the national accounts: gdp. Is not well understood even though the concepts are straight forward. The sum of the balances of the three accounts is zero. The sum of the balances of all current accounts in the world should be zero. Exports are someone"s imports, payments are received by foreigners, etc. Sum of the balances of all financial accounts in the world should be zero. Sum of the trade balances in the world should be zero. Summing up world balances should theoretically add up to zero. A rise in the target for the overnight rate in canada. Only affects the capital and financial account.
