Unit 2 - The UK economy - performance and policies
Institution
PEARSON (PEARSON)
Aesthetic summary sheet for theme 2.1.4 economics (option A, balance of payments), great to hang up on wall and consolidate knowledge with, provides key notes for each sub-theme. I used for mock exams and it was so helpful in helping me apply knowledge and analyse which is a huge part of the exam.
Unit 2 - The UK economy - performance and policies
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A Current
Economics theme 2.1.4 Balance of Payments exports of g
imports. It i
spending in
The Current account
Components of the Balance of 1. Balance of Trade in Goods: It
Payments: measures the difference between the Relations
value of a country's exports and imports and Othe
The balance of payments (BoP) is a record of of tangible goods (e.g., machinery, cars, Impact on
all economic transactions between a country deficit may
and clothing). A trade surplus occurs
and the rest of the world. It is divided into making exp
when exports exceed imports, and a
expensive.
two main components: the current account trade deficit occurs when imports
and the capital and financial account. exceed exports. Example: China Impact on
consistently runs a trade surplus due to higher savi
its strong manufacturing sector, growth. Ho
unsustaina
2. Balance of Trade in Services: It exporting products worldwide.
accounts for the value of services traded Impact on
creation in
internationally, such as tourism, financial
to job losse
services, and consulting. A surplus occurs when a 3. Income Balance: This includes
country exports more services than it imports. Impact on
earnings from abroad (e.g., dividends,
Example: The United States often has a surplus in deficit) can
interest, and wages) and payments price level.
services trade due to its leadership in technology
made to foreign investors. A surplus
and financial services.
indicates that a country earns more
Intercon
from its foreign investments than it Internat
pays to foreign investors. Internatio
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