ECON1102 Chapter Notes - Chapter 9: Exchange Rate, Property Income, Foreign Exchange Market
Document Summary
Balance of payments record of transactions between residents of a country and non-residents. Current account = - capital and financial account same value, opposite sign. E. g an aus purchases a k jap car and writes a cheques for k. There are no implications for capital and financial account. Jap company has 3 options with the money: they could use k to buy aus goods aus import = exports ca = 0. In practice, bop does not always equal 0 because abs can(cid:495)t measure perfectly. Current account transactions leading to a change of ownership of commodities, services, income flows and transfers. What is the difference between net exports or balance of trade (x-m) and current account. = balance of trade or net exports (x-m) + net primary income (includes net labour and property income payments/receipts) e. g if you work overseas. + net secondary income (transfer payments e. g foreign aid, govt. transfer payments from overseas)
