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.
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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