Ppt on current account deficits

Forensic Accounting: Some Strategies for Detecting & Preventing Fraud D. Larry Crumbley, CPA, CFF, Cr.FA, MAFF, FCPA KPMG Endowed Professor Department.

.C. Grossman and T.E. Wilson, “Assessing Financial Health,” Handbook of Governmental Accounting & Finance, Somerset, N.J.: John Wiley & Sons, 1992, pp. 38-1 to 38-13. Assess Financial Health of Governmental Units Ratios Negative Indicator Credit Industry Benchmark Cash and investments/current liabilities Decreasing Less than 1% Operating surplus (deficit)/total revenue 5% or consecutive Elastic revenue (sales, utilities, other elastic taxes/


Instructor: MELTEM INCE

nation’s international transactions. Algebraically: BOP = CA + KA Foreign Borrowing and Int’l Indebtedness A current account deficit must be financed either by: Net borrowing from foreigners This is recorded as a capital account surplus. Net borrowing from foreign central banks This is recorded as a balance of payments deficit. A nation’s Net International Investment Position is the difference between all foreign assets owned/


© The McGraw-Hill Companies, Inc., 1998 Irwin/McGraw-Hill Deficits And Debt Chapter 19.

expenditures. © The McGraw-Hill Companies, Inc., 1998 Irwin/McGraw-Hill Reasons for Concern About Budget Deficits u The government uses accounting tricks to make the deficit look smaller. l These are called off-budget expenditures, expenditures of money that are not counted/System u Funded and Unfunded Retirement Systems l An unfunded pension system is one in which pensions are paid from current revenues. © The McGraw-Hill Companies, Inc., 1998 Irwin/McGraw-Hill The Social Security Retirement System u Funded/


Current Developments in the Indian Economy with special reference to selected issues in Public Finance Prof. CHARAN WADHVA

pressures which beyond a socially acceptable level act as the most regressive tax on the fixed income and poor and vulnerable sections of the society. 3. Spilling over to unsustainable Current Account Deficit/BOP problems forcing depreciation of the currency and taking last recourse to IMF borrowings with austerity conditionalities lowering growth/worsening unemployment 4. Reducing inflows of foreign investment and remittances 5/


1 A Bird Eye View of the Current World Economy : Trade and Finance J.D. Han King’s University College at UWO Eco 370ppp #1.

9 Making a Sense in the Context of Macroeconomics National Income Accounting: Savings, Investment and Trade: U.S. and Major Partners Blue- Saving Red – Investment Orange – Current Account Observation: 1)Current account Deficits and Investment are + vely corrleated. Current account Surplus and Investment are –vely correlated.. 2)Current account Deficits and Savings are –vely correlated. Current account Surplus and Savings are +vely correlated. Let’s think about: 1. What will be the limit/


TRADE AND BALANCE OF PAYMENTS

, THEN INCOME FROM FOREIGN NATION STOCKS, BONDS, DEPOSITS, COMMERCIAL PAPER IS A CREDIT IN THE CURRENT ACCOUNT --- FOREIGN INVESTMENTS IN ANOTHER NATION ARE A DEBIT TO THE CURRENT ACCOUNT The U.S. Current Account Balance, 2005 (Millions of Dollars) U.S. Current Account Balance, 1950–2005 U.S. current account deficit looks ominous However, the deficit is not a sign of weakness: U.S. economic boom of the 1990s increased the demand/


Slides prepared by Thomas Bishop Chapter 12 National Income Accounting and the Balance of Payments Modified May 2010 by Chris Ball.

– I or I = S – CA Countries can finance investment either by saving or by acquiring foreign funds equal to the current account deficit.  a current account deficit implies a financial capital inflow or negative net foreign investment. When S > I, then CA > 0 and net foreign investment and/net foreign wealth in the world, and so is therefore the world’s largest debtor nation. And its current account deficit in 2004 was $670 billion dollars, so that net foreign wealth continued to decrease. The value of /


National Income Accounting and the Balance of Payments November 2011

or I = S – CA Countries can pay for investment either by using domestic saving or by borrowing foreign funds equal to the current account deficit. a current account deficit implies a financial capital inflow or negative net foreign investment. When S > I, then CA > 0 and net foreign investment and / net foreign wealth in the world, and is therefore the world’s biggest debtor nation. And its current account deficit in 2006 was $812 billion dollars. So, its net foreign wealth continued to decrease. The value /


1 Chapter 8 Aggregate Accounts, Budget Constraints, and Model Consistency © Pierre-Richard Agénor The World Bank.

borrowing of the government,  FB g, and the private sector,  FB p. l Rise (fall) in either the current account deficit or foreign exchange reserves must be accompanied by a rise (fall) in foreign savings (borrowing from abroad). 28 Savings-Investment Balance /Financial Openness: l If world interest rate, i *, is lower than the autarchy interest rate i, it is optimal to run a current account deficit (capital account surplus). l Maximize the present value of profits, PV, given by, PV = I 1  /(1 + i) * - I/


The Balance of Payments

a natural reaction to an existing situation or may require government intervention. BOP Adjustment What happens if the country has a current account deficit? The country must borrow from (or sell domestic securities to) the rest of the world to finance the current account deficit. As foreigners accumulate domestic securities, the domestic currency value falls which, in turn, raises net exports and consequently income. BOP Adjustment/


Session Title: Indian Government Financial Reporting Standards, Clarification of GASAB in reporting under accrual basis of accounting, Structure of Financial.

third parties for items of property, plant and equipment that were impaired, lost or given up is included in determining surplus or deficit when it becomes receivable; and (d). The cost of items of property, plant and equipment restored, purchased or constructed as /the end of the period. 75. An entity discloses the nature and effect of a change in an accounting estimate that has an effect in the current period or is expected to have an effect in subsequent periods. For property, plant and equipment, such /


Current account imbalances Doomsday or soft landing?

Nouriel Roubini and Brad Sester http://www.rgemonitor.com/http://www.rgemonitor.com/ Emerging market CBs stop buying US assets (Central banks financed 90% of the United States’ $530 billion current account deficit in 2003) Housing market crush in US leads to loss of wealth by households and increase savings risk a disorderly unraveling of the Bretton Woods 2 system: –sharp correction of/


BALANCE OF PAYMENT PROBLEMS. Current Account Deficit  Two broad ways in which a current account is covered – loans from abroad and investments from abroad.

foreigners will cause outflows in the form of repatriated profits and dividends — which could in fact intensify the current account deficit. Also, the increase in interest rates will have a deflationary effect on the domestic economy.  Finally, there/ will reduce imports. Therefore, deflationary fiscal and monetary policies can be implemented in order to adjust a current account deficit by reducing imports — this is an expenditure-reducing policy. CHANGE IN SUPPLY-SIDE POLICIES TO INCREASE COMPETITIVENESS/


Economics Section: Chp 35Further Reading Keywords – balance of trade, imports, exports, visible trade, invisible trade, deficits, surplus Class : Y11.

50% more as well. Economics Section: Chp 35Further Reading Keywords – balance of trade, imports, exports, visible trade, invisible trade, deficits, surplus What is the Balance of Payments? Is a measurement of a country’s dealings with the World. 2 elements: Current Account and Capital Account The Current account includes: – (a) Trade in Goods – (b) Trade in Services – (c) Net Flow of Investment Income – (d) Transfers of/


University of Papua New Guinea International Economics Lecture 14: National Income Accounting and the Balance of Payments.

a budget surplus If T < G, it is a budget deficit The University of Papua New Guinea Slide 12 Lecture 14: National Income Accounting and the Balance of Payments Michael Cornish Why care about the current account? Current account balance = X – M = NX [‘Net Exports’] When X > M: current account surplus When X < M: current account deficit Note: Technically, the current account also includes net income (this is the ingoings and outgoings of/


Chapter 8 Balance of Payment Account Lectured by: Mr. SOK Chanrithy.

exports and imports of both goods and services. ▫If CA > 0, then exports of goods and services exceed imports and the country has a current account surplus. ▫If CA < 0, then imports exceed exports and the country has a current account deficit. the trade balance (or goods balance) can be defined as, GB = EX G – IM G Service balance can be defined as SB = EX/


An Analytical Framework With Application.  Deficits: Definitions and explanations  Fiscal sustainability. What do you want to call fiscal balance? 

full-employment deficit  They calculate what would have been the deficit if the economy was at the equilibrium Y  Is this appropriate for developing countries?  The terms of trade may be at non-equilibrium levels  The current account may be / Domestic rates and the “peso problem”  Foreign rates are volatile  Old debt may be at different rates than current rates  “Structural fiscal deficit” is where the FD&BB curve cross the NN curve -30% -20% -10% 0% 10% 20% /


24-1 National Income and the Current Account Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin Chapter 24.

in income will increase employment. 24-32 Price and Income Adjustments and Internal and External Balance Case III: Deficit in the current account; unacceptably high unemployment The direction of the effect is unclear. Expansionary policy to increase employment will worsen the current account deficit. Contractionary policy to reduce the current account deficit will worsen unemployment. 24-33 Price and Income Adjustments and Internal and External Balance Case IV: Surplus/


Www.themegallery.com Chapter 6 National Income and the Current Account.

+ (T – G) – I = X – M Therefore, the difference between total saving (private + government) and investment must equal a country’s current account balance. Equilibrium Income and the Current Account Balance  This current account deficit means that total saving (100) is less than investment (300). In our example, the current account balance is X - M = 150 – [50+0.1(Y)] X – M = 150 – 50 – 0.1(3,000) X – M/


2010-11 Financial Statements Changes Information Session for School Boards and External Auditors Financial Analysis and Accountability Branch Fall 2011.

2007-08 Grants for Student Needs 101 Note 2 - Change in Accounting Policy continued  The impact on the current period Statement of Operations  Starting with Annual Surplus/Deficit as per prior year policy – Add DCC recognized into revenue /and deduct in-year provincial capital contributions received at arrive at annual surplus/deficit as currently reported. 2007-08 Grants for Student Needs 102 Note 4 – Accounts Receivable – Government of Ontario  Updated note.  Receivable is adjusted to reflect/


Pakistan Balance of Payment, Current and Capital Accounts Kamran Tabish (15770) Ghulam Abbas (14087) Faizan Khan (15568) Nehreeza Aklaq (15082) Nida Tariq.

: Payments > Receipts History of BOP  Pakistan’s BOP situation has not been satisfactory since independence. The country with the exception of five years has been running a persistent deficit in her BOP on current account Years of Surplus in BOP of Pakistan  These years are as follows:  1950-51  1954-55  1955-56  1958-59  1959-60  2002-04  After the surplus years/


2.13 The Balance of Payments on Current Account Why do countries trade with each other?

slides to construct a table of key points to develop a balanced argument as to whether or not a persistent deficit on the current account of the balance of payments matters or not. Yes, it mattersNo, it doesn’t matter Multiple Choice 1 All/ other things being equal, which of the following is most likely to reduce a balance of payments deficit on current account? An increase in a) the price level b) consumption c) productivity d) the money supply Can you explain your answer?/


Copyright © 2012 Pearson Education. All rights reserved. Chapter 13 National Income Accounting and the Balance of Payments.

S – I or I = S – CA Countries can finance investment either by saving or by acquiring foreign funds equal to the current account deficit. –a current account deficit implies a financial asset inflow or negative net foreign investment. When S > I, then CA > 0 so that net foreign / most negative net foreign wealth in the world, and so is therefore the world’s largest debtor nation. Its current account deficit in 2010 was $441 billion dollars, so that net foreign wealth continues to decrease. In 2010, US net/


1 The Honorable David M. Walker Comptroller General of the United States American Accounting Association Chicago, IL August 7, 2007.

Centers for Medicare and Medicaid Services alternative assumption that physician payments are not reduced as specified under current law. Percent of GDP 11 State and Local Governments Face Increasing Fiscal Challenges Percent of GDP Operating Surplus/Deficit Measure Sources: Historical data from National Income and Product Accounts. Historical data from 1980 – 2006, GAO projections from 2007 – 2050 using many CBO projections and assumptions/


Current theoretical & practical issues in autism diagnosis Dr. Elizabeth Sheppard Developmental Cognitive Neuropsychology (C8CLDC) Child Clinical Neuropsychology.

) Prevalence of autism Possible reasons for increase Possible reasons for increase 3) The current rate is correct but there has not been an increase – diagnostic boundaries have changed/account of autism Talk about problems with EF account of autism Neuropsychological Studies The goal of neuropsychological studies is to establish the primary deficit in each disorder. The goal of neuropsychological studies is to establish the primary deficit in each disorder. A PRIMARY deficit needs to: A PRIMARY deficit/


Recovery Plan Version th March 2013

(6 beds) and HDU (8 beds) Dedicated JAG accredited Endoscopy Unit Obstetrics and Gynaecology Dedicated Outpatient facility Currently in deficit against plan, which in the main can be attributed to issues surrounding EPR particularly around volumes in outpatients /Structure – 1st Jan 2012 Observations TRFT has, in recent years, had an outdated Management structure with unclear accountabilities and responsibilities. It is likely that the complexity of the structure has directly impacted the ability of the /


Session 4 & 5 Session Title

not represent transactions whereby Government has receivables and payables and they close to ‘Government Account’. Government Accounts – Represents cumulative deficit and surplus of the past under heads whose balances are not carried forward. There / payable, tax in arrears, non-tax revenue due) Actual position of assets (Current assets including receivables, inventories etc) and liabilities ( e.g., current such as payables and pension liability). Depreciation (erosion in physical assets, financial assets/


NS3040 Winter Term 2015 Balance of Payments. Deutsche Bank: BP Misconceptions I General concerns at the time (October 2004) over U.S. BP deficits: Rising.

Large capital market, low risk, low inflation Because of this attractiveness might argue that it is the capital inflow that causes the current account deficit Surplus may be driven by foreign demand for U.S. assets rather than any structural imbalance in U.S. economy Turns out/ less Tax more Less government spending or combination of all four One reason U.S. often runs large current account deficits is none of these adjustment mechanisms are popular or painless 20 Interpreting Trade Data I New OECD and WTO/


Balance of Payments Accounting. The Balance of Payments Recall the open economy accounting identity: Income = ExpendituresRecall the open economy accounting.

deficit countries are spending more than they earn (borrowing from the rest of the world) Balance of Payments Accounting Anything that we buy or sell to the rest of the world must be paid for.Anything that we buy or sell to the rest of the world must be paid for. The current account/ (-) Net Unilateral TransfersNet Unilateral Transfers Payments from foreign countries (+) Payments to foreign Countries (-) The US Current Account: 2003 (in Millions of $s) Exports of Goods, Services, and Income Goods: $ 713,122/


Deficits, Debt and the Dollar Martin Wolf, Associate Editor & Chief Economics Commentator, Financial Times Oxonia October 26 th 2005 Department of Economics,

to escape the slow down Low real rates, despite the strong global economic growth Exploding US current account deficits What is going on? 10 2. Savings surpluses and deficits What lies behind all this is a move into surplus of savings over investment in a /not to spend the windfall at once –The crucial players are the Asian emerging countries, since they could afford to run current account deficits 42 5. End-game There are good reasons for the Asian countries to alter their policies: –It is hard to sterilise/


The International Balance of Payments

for £s = the supply of £s  inflows = outflows in the BoP  BoP is exactly = zero Since BoP = Current Account + Capital Account: a Current Account surplus => a Capital Account deficit a Current Account deficit => a Capital Account surplus c) The balance for Official Financing If the exchange rate is fixed, and there is a BoP deficit  outflows > inflows  supply of £s > demand for £s The Central Bank must offset this excess supply of/


Does Capital Mobility Finance or Cause a Current Account Imbalance? Antonio H-D Yan Universidad Francisco Marroquin March 22, 2006.

and 6b – G-7 Conclusion (1) For developed countries, capital mobility is demand-induced and financial account functions to finance current account. For emerging economies, capital mobility works like supply-pushed; the financial account causes current account deficit. For emerging economies (South Korea and Thailand), other investment (bank loans) brings to current account deficits. Conclusion (2) Without a sophisticated and sound financial system should not recklessly dismantle their restrictions of/


Chapter 12. Preview National income accounts –measures of national income –measures of value of production –measures of value of expenditure National.

capital accumulation: S=I. An open economy can use its saving to (i) add to its capital stock or (ii) acquire foreign wealth: S=I+CA. A country running a current account deficit is eating off its wealth, held as net foreign assets (NFA), or adding to its net foreign liabilities (and vice versa). Similar to an individual that borrows to finance his/


Current Account Metzler Diagram.

. If world interest rate is lower than autarky rate, the the country would have a current account deficit. Current Account Surplus SP + ( T-G) rW rA I S,I Current Account Deficit SP + ( T-G) rA I rW S,I Current Account Surplus SP + ( T-G) rW rA I S,I What shifts the Current Account? Temporary shock to income may change savings profile. Example: Thailand and Sri Lanka are hit by/


An International Comparison of Generational Accounts Jaime Álvarez Bandrés Ignacio Establés Susán Jose Antonio Mairena Peral.

the Europea Union have different estrategies. IMF uses budget deficit targets in determining structural adjustment policies. UE has adopted a deficit target as the principal requirement for membership in its proposed single currency monetary union. European Monetary union is worth bearing the following in mind: 6. Generational Accounting vs. Defficit Accounting Imposing higher net taxes on current generations by printing money. Countries addressing the roots/


Chapter 12 National Income Accounting and the Balance of Payments November 2009.

or I = S – CA Countries can pay for investment either by using domestic saving or by borrowing foreign funds equal to the current account deficit.  a current account deficit implies a financial capital inflow or negative net foreign investment. When S > I, then CA > 0 and net foreign investment and/ net foreign wealth in the world, and is therefore the world’s biggest debtor nation. And its current account deficit in 2006 was $812 billion dollars.  So, its net foreign wealth continued to decrease. The /


Academy of Economic Studies Doctoral School of Finance and Banking Determinants of Current Account for Central and Eastern European Countries MSc Student:

; Calderòn, Chong and Loayza (1999) focused on developing countries and distinguish between transitory and permanent components of current account deficits. They found that current account deficit is moderately persistent and there exists a negative relation between output growth rate and current account; Literature Review Chinn and Prasad (2000) view current account balance as the outcome of variations in structural and macroeconomic determinants that influence the saving-investment balance. The/


Accounting and Financial Condition. Lecture 10 Outline Overview Financial statements—pre-GASB 34. GASB 34—Overall financial statements Using financial.

liabilities, which tend to be short-term in nature. This implies that modified accrual accounting focuses on current assets and current liabilities. (Figure 10-1). –Revenues and expenditures: Revenues are recorded only when / Capital Tax certiorari Workers Comp., Unemployment & Insurance Employee benefit accrued liability Inventory Subsequent years expenditures Unrestricted (deficit) Total Net Assets-$ Government-wide Financial Statements Statement of activities: is a major change from the previous/


The Goods Market in an Open Economy Econ 302 Slide #1 Current Account Exports931 Imports1100 Trade balance (deficit = -) (1)-169 Investment income received242.

income paid265 Net investment income (2)-23 Net transfers received (3)-41 Current account balance (deficit = -) (1)+(2)+(3)-233 Capital Account Increase in foreign holdings of U.S. assets542 Increase in U.S. holdings/302 Slide #5 Openness in Goods and Financial Markets Openness in Financial Markets The Balance of Payments The Current Account Balance (+,-) = Capital Account Balance (+,-) A Current Account Deficit increases foreign holdings of U.S. assets and vice versa. The Goods Market in an Open Economy /


Connolly – International Financial Accounting and Reporting – 4 th Edition CHAPTER 18 DISTRIBUTION OF PROFITS AND ASSETS.

loss as unrealised Connolly – International Financial Accounting and Reporting – 4 th Edition Revaluation deficits A provision made in the accounts is a realised loss. Therefore, a revaluation deficit is a realised loss. However, if a revaluation deficit arises on a revaluation of all non-current assets (or on a revaluation of all non-current assets other than goodwill), the revaluation deficit is an unrealised loss. Where a company/


National and Kapodistrian University of Athens Department of Economics UADPhilEcon Global Imbalances Do we eat too much? The current Economic Crisis as.

theories. *They focus on Minsky’s theory about financial crisis. 2.Select data. 3.Find the impact of the Current Account Deficit. *Estimate regressions with OLS. 4.Discuss Conclusions Theoretical Background Minsky (1970s) – Developed a model on the domestic economy/developed economies. The best proxy for consumption is wage and they will prove a link between wages and current account deficits in order to argue that increase in wages reinforced tendencies that leaded to the brink of financial crisis. /


Session Investment Theory. Topic Outline Foreign Direct Investment Trade Deficit Ownership Location Internalisation Balance of Payment.

- term trade credits, cross-border loans, currency & bank deposits, & other accounts receivable and payable in cross-border trade. Current & Financial/Capital Account Balances, US, 1992 - 1999 (US$ bn) Source: International Monetary Fund, Balance of Payments Statistics Yearbook, 2000. Are Trade Deficits Bad? It depends … First, all countries cannot have a trade surplus (positive Current Account balance). All open economies are part of the same global economic/


Relations Between the Balance of Payments and Other Macroeconomic Accounts Thorvaldur Gylfason Course on External Vulnerabilities and Policies Tunis, March.

financing of the balance of payments  Excess of domestic demand (absorption) over supply  deficit in current account of the BOP GNDI – C – I = S – I = CAB  Deficit in the CAB must be financed by net capital inflows or drawdown of international reserves CAB/ Recall:  R = X – Z + F So,  R -1 = 30 – 50 + 15 = -5, so R -2 = 15 Current account deficit, overall deficit Current account deficit, overall deficit  R -1 /Z -1 = 10/50 = 0.2 Equivalent to 2.4 (= 0.212) months of imports Equivalent to 2.4 (= 0.212/


The Balance of Payments. © 2002 by Stefano Mazzotta 1 Learning Outcomes 1. Definition of the balance of payments (BOP) and its accounts 2. Some macroeconomic.

abroad © 2002 by Stefano Mazzotta 21 Economic intuition behind CA < 0 The current account deficit implies that –imports > exports –the current supply of home currency > the current demand for home currency –there exists a net demand for “investments” in home/country investment abroad –Government’s sell of the home currency 4. Comments on Current Account deficit © 2002 by Stefano Mazzotta 26 How to “cure” the CA deficit: Argument 1 Make home currency depreciate: –Increase the demand for home products abroad/


1 International Finance Chapter 5 National and International Income Accounting and the Balance of Payments.

investment position. 34 Net Foreign Wealth The U.S. has the most negative net foreign wealth in the world, and so is therefore the world’s largest debtor nation. Its current account deficit in 2014 was $389.5 billion dollars, so net foreign wealth continues to decrease. The value of foreign assets held by the U.S. has grown since 1980, but liabilities/


Perspectives on the Current International Financial and Macroeconomic Situation Celebrity Speakers Ltd., London, May 14, 2007 Jeffrey Frankel Harpel Professor.

take over Pakistan, S.A. or Egypt Hard landing of the $: foreigners pull out => $ ↓ & i ↑ => possible return of stagflation. The US Current Account Deficit: Origins and Implications Revsied version of Our Fiscal Future, 2006 21 Trade balance is deteriorating 22 Trade deficit Current account deficit for 2006 ≈ 6% GDP, a record. –Would set off alarm bells in Argentina or Brazil Short-term danger: Protectionist legislation, such as/


THE INTERNATIONAL ECONOMIC ACTIVITY OF THE NATION The balance of payments Fundamentals of balance of payment accounting Defining international economic.

said to balance when the total of credit items is exactly equal to the total of debit items. Hardly does this occur. There is either a deficit or a surplus in the current accounts of the balance of payments. The balance of payment disequilibrium is a situation whereby payments of visible exports or receipts from invisible exports exceed the payments fro visible and/


© 2015 H. J. Umbaugh and Associates, Certified Public Accountants, LLP. All rights reserved. The Importance of Long-Term Financial Planning Presented by:

be declared dormant by the fiscal body and remaining balances may be transferred to the General Fund. 32 © 2015 H. J. Umbaugh and Associates, Certified Public Accountants, LLP. All rights reserved. 33 Managing Budget Deficits Reduction of Current Budget (Appropriations) – Estimate realistic expenditures through year-end – Formalize budget reductions with the passage of a “Reduction of Appropriation” resolution Discontinue Additional Appropriations – Only request/


The Origin of Economic Crisis-1991 Unsustainable fiscal deficit of the government caused the crisis Internal imbalances in the fiscal situation and external.

the crisis of 1991 Gulf crisis of the late 80s worsened the fiscal deficit and current account deficit dituation of Indi a The fiscal imbalance Main indivcators of fiscal desicit are The budgetory deficit The revenue Deficit Gross Fiscal Deficit GFD Revenue Deficit denotes the difference between revenue receipts and revenue expenditure. The conventional deficit (budgetary deficit) is the difference between all receipts and expenditure, both revenue and capital. The/


AS: 3.2.3 E CONOMIC PERFORMANCE 2.3.4 The balance of payments on current account Why do countries trade with each other?

goods, thus improvements in economic growth and consumer spending feeds through to an increased and persistent deficit. W HY IS THERE A PERSISTENT DEFICIT ON THE CURRENT ACCOUNT ? IMPORTS EXPORTS 2) In terms of manufacturing, UK firms have become less competitive in / HOICE 1  All other things being equal, which of the following is most likely to reduce a balance of payments deficit on current account? An increase in a) the price level b) consumption c) productivity d) the money supply Can you explain your /


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