Current Account :
The transactions are divided into two broad groups : cur¬rent account and capital account.
The current account in¬cludes exports and imports of goods, services (including investment income) and unilateral transfers.
The capital account includes financial flows related to international direct investment, investment in government and private securities, international bank transactions and changes in official gold holdings and foreign exchange reserves. (IMF) The International Monetary Fund (IMF) which strives for international comparability, defines the balance of payments as “a statistical statement for a given period showing (1) transactions in goods, services and income between an economy and the rest of the world (2) changes of ownership and other changes in that econ¬omy’s monetary gold, special drawing rights (SDRs) and claims on and liabilities to the rest of the world, and (3) unrequited transfers and counterpart entries that are needed to balance, in the accounting sense, any entries for the foregoing transactions and changes which are not mu¬tually offsetting.
(U.S.) The six balances that are currently published quar¬terly concerning the U.S. balance of payments are....
Balance on Merchandise Trade
The balance on merchandise trade which measures the net transfer of merchandise exports and imports (which differs in some ways from the trade balance pub¬lished monthly by the Bureau of the Census)
Balance on Services
The balance on services which measures the net transfer of services, such as travel, other transportation and business, professional and other technical services (this balance was redefined in 1990 to exclude investment income)
Balance on Investment Income
The balance on investment income which measures the net transfer income on direct and portfolio invest¬ments
Balance on Goods Services and Income
The balance on goods, services and income which measures the net transfer of merchandise plus services and income on direct and portfolio investment (this balance is equivalent to the pre-1990 balance on goods and services; it is also conceptually comparable to net exports of goods and services included in GNP)
Balance on Unilateral Transfers
The balance on unilateral transfers (net) which measures the net value of gifts, contributions, government grants to foreign countries and other unrequited transfers
Balance on Current Account
The balance on current account (widely used for analysis and forecasting), which measures transactions in goods, services, income and unilateral transfers between residents and nonresidents.
Balance of Trade
The difference between a country’s imports and exports over a set period
(a) A balance of trade defi¬cit
is when a country imports more than it exports
(b) A balance of trade surplus
is when a country exports more than it imports
balance of payments
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