Income of the nation (Y) or receipt from the expenditure on its final goods and services is Y =C+I+G+X
Absorption A is a nation's total expenditure on domestic final goods and services.
i.e. A = C+I+G+M
And So, Y-A = X-M
Or, B = Y-A, B = current account surplus, if net factor income is zero.
Current Account deficit means absorption exceeds output.
Now, dB = dY-dA
Implies B will be improved only if output increases more to absorption.
Balance of Payment policy instrument can be classified in two segment on the basis of their initial impact on the output or absorption.
In order to change absorption without changing output, a policy must lead to replacement of foreign goods by domestic goods or vice-versa. e.g. devaluation or import restriction. This is expenditure switching policy.
Policies that affect both income and absorption (e.g. fiscal and monetary policy) are expenditure reducing policy
analysis of the balance of payments based upon the price elasticities of demand for imports and exports
Yes, as the balance of trade is only one part of the balance of payments
Balls and weiners!
A persistent deficit in the balance of payments leads to an individual not paying their way. Society as a whole can get into a deficit when many people are defaulting on payments.
The primary source of similar statistics for balance of payments and economic performance worldwide is theInternational Monetary Fund, Balance of Payments Statistics.
analysis of the balance of payments based upon the price elasticities of demand for imports and exports
analysis of the balance of payments based upon the price elasticities of demand for imports and exports
A balance of payments deficit means there is an imbalance in the balance of payments of a country where the payments the country makes are more than the payments they received. It means the balance of payments is negative. A balance of payments deficit is,when government expenditure is more than government revenue
All fixed costs.
It has a balance of payments deficit.
Yes, as the balance of trade is only one part of the balance of payments
International Balance of Payments
Balls and weiners!
Tom Drinkwater has written: 'A guide to the balance of payments' -- subject(s): Balance of payments
Features of Balance of Payments Balance of Payments has the following features: (i) It is a systematic record of all economic transactions between one country and the rest of the world. (ii) It includes all transactions, visible as well as invisible. (iii) It relates to a period of time. Generally, it is an annual statement. (iv) It adopts a double-entry book-keeping system. It has two sides: credit side and debit side. Receipts are recorded on the credit side and payments on the debit side. (v) When receipts are equal to payments, the balance of payments is in equilibrium; when receipts are greater than payments, there is surplus in the balance of payments; when payments are greater than receipts, there is deficit in the balance of payments. (vi) In the accounting sense, total credits and debits in the balance of payments statement always balance each other.
A persistent deficit in the balance of payments leads to an individual not paying their way. Society as a whole can get into a deficit when many people are defaulting on payments.
Balance of payments in pakistan in 2011