Date post: | 21-Dec-2015 |
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Definition
Accounting system measuring all economic transactions between the residents of one country and the rest of the world
credits debits
a. exports of goods imports of goods
a = Trade Balance
b. exports of services imports of services
credits debits
a. exports of goods imports of goods
a = Trade Balance
b. exports of services imports of services
c. unilateral transfers
credits debits
a. exports of goods imports of goods
a = Trade Balance
b. exports of services imports of services
c. unilateral transfers
a + b + c = Current Account Balance
credits debits
a. exports of goods imports of goods
a = Trade Balance
b. exports of services imports of services
c. unilateral transfers
a + b + c = Current Account Balance
d. short-term capital into Canada short-term capital from Canada
credits debits
a. exports of goods imports of goods
a = Trade Balance
b. exports of services imports of services
c. unilateral transfers
a + b + c = Current Account Balance
d. short-term capital into Canada short-term capital from Canada
e. short-term official lending to Canada short-term official lending from Canada
credits debits
a. exports of goods imports of goods
a = Trade Balance
b. exports of services imports of services
c. unilateral transfers
a + b + c = Current Account Balance
d. short-term capital into Canada short-term capital from Canada
e. short-term official lending to Canada short-term official lending from Canada
f. long-term private investment into Canada long-term private investment from Canada
credits debits
a. exports of goods imports of goods
a = Trade Balance
b. exports of services imports of services
c. unilateral transfers
a + b + c = Current Account Balance
d. short-term capital into Canada short-term capital from Canada
e. short-term official lending to Canada short-term official lending from Canada
f. long-term private investment intoCanada
long-term private investment from Canada
g. long-term official lending to Canada long-term official lending from Canada
credits debits
a. exports of goods imports of goods
a = Trade Balance
b. exports of services imports of services
c. unilateral transfers
a + b + c = Current Account Balance
d. short-term capital into Canada short-term capital from Canada
e. short-term official lending to Canada short-term official lending from Canada
f. long-term private investment intoCanada
long-term private investment from Canada
g. long-term official lending to Canada long-term official lending from Canada
d + e + f + g = Capital Account Balance
credits debits
a. exports of goods imports of goods
a = Trade Balance
b. exports of services imports of services
c. unilateral transfers
a + b + c = Current Account Balance
d. short-term capital into Canada short-term capital from Canada
e. short-term official lending to Canada short-term official lending from Canada
f. long-term private investment intoCanada
long-term private investment from Canada
g. long-term official lending to Canada long-term official lending from Canada
d + e + f + g = Capital Account Balance
h. purchase of currencies and/or gold by thegovernment
credits debits
a. exports of goods imports of goods
a = Trade Balance
b. exports of services imports of services
c. unilateral transfers
a + b + c = Current Account Balance
d. short-term capital into Canada short-term capital from Canada
e. short-term official lending to Canada short-term official lending from Canada
f. long-term private investment intoCanada
long-term private investment from Canada
g. long-term official lending to Canada long-term official lending from Canada
d + e + f + g = Capital Account Balance
h. purchase of gold and/or other currencies by thegovernment
h = Official Reserve Balance
Note
By now, the BOP should be …balanced, that is,
Current Account + Capital Account + Official Reserve Balance = 0
credits debits
a. exports of goods imports of goods
a = Trade Balance
b. exports of services imports of services
c. unilateral transfers
a + b + c = Current Account Balance
d. short-term capital into Canada short-term capital from Canada
e. short-term official lending to Canada short-term official lending from Canada
f. long-term private investment intoCanada
long-term private investment from Canada
g. long-term official lending to Canada long-term official lending from Canada
d + e + f + g = Capital Account Balance
h. purchase of gold and/or other currencies by thegovernment
h = Official Reserve Balance
i. errors and omissions
Exemplification
1. Canada loans C$ 1 m to Haiti for 10 years by creating a C$ 1 m deposit with a Toronto Bank.
2. A Canadian firm sells $1 m worth of wheat to Haiti. The wheat is paid from the deposit created from the loan.
3. A Canadian receives C$ 0.04 m in interest from the German bonds she owns. The C$0.04 m is deposited in a German bank.
4. A Canadian tourist travels to Germany and spends C$0.04 m
5. Canada gives C$0.8 m worth of humanitarian aid to Somalia.
credits(+) debits(-)
a. exports of goods imports of goods
a = Trade Balance
b. exports of services imports of services
c. unilateral transfers
a + b + c = Current Account Balance
d. short-term capital into Canada
(1) C$1 m deposit for Haiti
short-term capital from Canada
e. short-term official lending to Canada short-term official lending from Canada
f. long-term private investment into Canada long-term private investment from Canada
g. long-term official lending to Canada long-term official lending from Canada
(1) C$1 m loan for Haiti
d+e+f+g = Capital Account Balance
h. purchase of gold and/or other currencies bythe government
g = Official Reserve Balance
i. i. errors and omissions
Exemplification
1. Canada loans C$ 1 m to Haiti for 10 years by creating a C$ 1 m deposit with a Toronto Bank.
2. A Canadian firm sells $1 m worth of wheat to Haiti. The wheat is paid from the deposit created from the loan.
3. A Canadian receives C$ 0.04 m in interest from the German bonds she owns. The C$0.04 m is deposited in a German bank.
4. A Canadian tourist travels to Germany and spends C$0.04 m
5. Canada gives C$0.8 m worth of humanitarian aid to Somalia.
credits(+) debits(-)
a. exports of goods:
(2) C$1 m worth of wheat to Haiti
imports of goods
a = Trade Balance
b. exports of services imports of services
c. unilateral transfers
a + b + c = Current Account Balance
d. short-term capital into Canada short-term capital from Canada
(2) C$1 m worth of wheat to Haiti
e. short-term official lending to Canada short-term official lending from Canada
f. long-term private investment into Canada long-term private investment from Canada
g. long-term official lending to Canada long-term official lending from Canada
d+e+f+g = Capital Account Balance
h. purchase of gold and/or other currencies bythe government
g = Official Reserve Balance
i. i. errors and omissions
Exemplification
1. Canada loans C$ 1 m to Haiti for 10 years by creating a C$ 1 m deposit with a Toronto Bank.
2. A Canadian firm sells $1 m worth of wheat to Haiti. The wheat is paid from the deposit created from the loan.
3. A Canadian receives C$ 0.04 m in interest from the German bonds she owns. The C$0.04 m is deposited in a German bank.
4. A Canadian tourist travels to Germany and spends C$0.04 m
5. Canada gives C$0.8 m worth of humanitarian aid to Somalia.
credits(+) debits(-)
a. exports of goods imports of goods
a = Trade Balance
b. exports of services
(3) C$0.04 in interest from German bonds
imports of services
c. unilateral transfers
a + b + c = Current Account Balance
d. short-term capital into Canada short-term capital from Canada
(3) C$0.04 in interest from German bonds
e. short-term official lending to Canada short-term official lending from Canada
f. long-term private investment into Canada long-term private investment from Canada
g. long-term official lending to Canada long-term official lending from Canada
d+e+f+g = Capital Account Balance
h. purchase of gold and/or other currencies bythe government
g = Official Reserve Balance
i. i. errors and omissions
Exemplification
1. Canada loans C$ 1 m to Haiti for 10 years by creating a C$ 1 m deposit with a Toronto Bank.
2. A Canadian firm sells $1 m worth of wheat to Haiti. The wheat is paid from the deposit created from the loan.
3. A Canadian receives C$ 0.04 m in interest from the German bonds she owns. The C$0.04 m is deposited in a German bank.
4. A Canadian tourist travels to Germany and spends C$0.04 m
5. Canada gives C$0.8 m worth of humanitarian aid to Somalia.
credits(+) debits(-)
a. exports of goods imports of goods
a = Trade Balance
b. exports of services imports of services
(4) C$0.04 Canadian tourist in Germany
c. unilateral transfers
a + b + c = Current Account Balance
d. short-term capital into Canada
(4) C$0.04 Canadian tourist in Germany
short-term capital from Canada
e. short-term official lending to Canada short-term official lending from Canada
f. long-term private investment into Canada long-term private investment from Canada
g. long-term official lending to Canada long-term official lending from Canada
d+e+f+g = Capital Account Balance
h. purchase of gold and/or other currencies bythe government
g = Official Reserve Balance
i. i. errors and omissions
Exemplification
1. Canada loans C$ 1 m to Haiti for 10 years by creating a C$ 1 m deposit with a Toronto Bank.
2. A Canadian firm sells $1 m worth of wheat to Haiti. The wheat is paid from the deposit created from the loan.
3. A Canadian receives C$ 0.04 m in interest from the German bonds she owns. The C$0.04 m is deposited in a German bank.
4. A Canadian tourist travels to Germany and spends C$0.04 m
5. Canada gives C$0.8 m worth of humanitarian aid to Somalia.
credits(+) debits(-)
a. exports of goods
(5) C$0.8 m worth of aid to Somalia
imports of goods
a = Trade Balance
b. exports of services imports of services
c. unilateral transfers
(5) C$0.8 m worth of aid to Somalia
a + b + c = Current Account Balance
d. short-term capital into Canada short-term capital from Canada
e. short-term official lending to Canada short-term official lending from Canada
f. long-term private investment into Canada long-term private investment from Canada
g. long-term official lending to Canada long-term official lending from Canada
d+e+f+g = Capital Account Balance
h. purchase of gold and/or other currencies bythe government
g = Official Reserve Balance
i. i. errors and omissions
credits(+) debits(-)
a. exports of goods:
(2) C$1 m worth of wheat to Haiti
(5) C$0.8 m worth of aid to Somalia
imports of goods
a = Trade Balance
b. exports of services
(3) C$0.04 in interest from German bonds
imports of services
(4) C$0.04 Canadian tourist in Germany
c. unilateral transfers
(5) C$0.8 m worth of aid to Somalia
a + b + c = Current Account Balance
d. short-term capital into Canada
(1) C$1 m deposit for Haiti
(4) C$0.04 Canadian tourist in Germany
short-term capital from Canada
(2) C$1 m worth of wheat to Haiti
(3) C$0.04 in interest from German bonds
e. short-term official lending to Canada short-term official lending from Canada
f. long-term private investment into Canada long-term private investment from Canada
g. long-term official lending to Canada long-term official lending from Canada
(1) C$1 m loan for Haiti
d+e+f+g = Capital Account Balance
h. h. purchase of gold and/or other currencies by the government
g = Official Reserve Balance
i. i. errors and omissions