Description

Explore the Balance of Payments (BoP) and its crucial role in understanding a nation’s economic health. The three main components - the current account, capital account, and financial account - their mechanics, key transactions, and real-world examples. Learn how the BoP remains balanced through double-entry bookkeeping and why sustainable external balances matter for investors.

Learning Objectives

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1. Recall how the balance of payments tracks international transactions.
2. Recall the implications of a current account deficit.
3. Recall the interplay between the current account and the financial account.
4. Recall the concept of a double-deficit.