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Question: The balance of payments of a country. 18/20
Answer: The current account of the balance of payments of a country records all the flows of income between an economy and the rest of the world and includes trade in goods, trade in services ,net investment income and net transfers. In simple terms it is the difference between the imports and exports of the country.
Figure 1 shows that in 2009 consumption fell by 3% and this is likely to deteriorate the current account balance . Imports are likely to decrease because consumers will not need or want the goods and this is backed up by the figures in figure 1 where it shows imports have decreased in 2009 by 13%. The fall in consumer spending may also affect exports as manufacturers may not produce so many goods or the world economy may be suffering the same downturn and figure one shows in 2009 exports also decreased but by 11% which is less than the decrease in imports. However the current ac...(short extract)
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- Subject: Economics
- Course: Economics
- Level: A-Level
- Year: Not applicable
- Mark: 90%
- Words: 694
- Date submitted: September 16, 2013
- Date written: February, 2013
- References: No
- Document type: Essay*
- Essay ID: 5042
