Chapter 3

A country's record of international transactions presented in a double-entry bookkeeping form.

Balance on currenct account (BCA) + balance on capital account (BKA) + balance on financial account (BFA) + balance on the reserves account (BRA) = 0

Balance of payment entry capturing capital transfers and the cross-border acquisition and disposal of nonproduced nonfinancial assets such as natural resources and marketing assets.

Balance of payment entry representing the exports and imports of goods and services, and unilateral transfer.

Balance of payment entry capturing all sales and purchases of financial assets, real estate, and businesses.

Investment in a foreign country that gives the MNC a measure of control.

Represents exports and imports of tangible goods (e.g., oil, wheat, clothes, automobiles, computers, etc.)

Refers to the initial deterioration and eventual improvement of the trade balance following the depreciation of a country's currency.

Covers all purchases and sales of international reserve assets. Includes transactions undertaken by the authorities to finance the overall balance and intervene in foreign exchange markets.

-Gold
-Foreign exchanges
-Special drawing rights (SDRs)
-Reserve positions in the IMF

Includes transactions in currency, bank deposits, trade credits, etc.

Is the cumulative balance of payments including the current account, capital account, financial account, and the statistical discrepancies.

Mostly represents sales and purchases of foreign financial assets, such as stocks and bonds, that do not involve a transfer of control.

Consists largely of payments and receipts of interest, dividends, and other income on foreign investments that were previously made.

Include payments and receipts for legal, consulting, financial, and engineering services, royalties for patents and intellectual properties, shipping fees, and tourist expenditures.

Involves "unrequited" payments