Balance+of+payments

Thebalance of payments is a country's account with the rest of the world.All the transactions between citizens and organizations of a country and foreign organisations are recorded as the balance of payments.

The current accounts records all the trade on a day to day basis,that is goods and services which are continuously traded.


 * The Current account :**

The C.A. is divided into two parts visibleandinvisible account which records goods and services respectively .Examples - films,tourism,banking,insurance.

The Capital Account :

The deficit of the current account is offset by the surplus of the capital account.The capital account is a record of asset transcations across international borders. Net balance of payments =current account balance +capital account balance =0

The current account incicates whether a country is paying its way day by day,showing whetehr it is exporting sufficient domestic goods and services to pay for its imports of foreign goods and services.All countries cannot have a positive current accounts.