FIN 621 Lecture Notes - Lecture 2: Foreign Exchange Spot, Capital Account, Japanese Yen
1 Mar 2016
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Chapter 3: balance of payments (jan 26th, 2016) Balance of payments accounting: the statistical record of a country"s international transactions over a certain time in the form of double-entry bookkeeping. N. b. when we say a country"s balance of payments we are referring to the transactions of its citizens and government. Example: suppose that maple bicycle in maple, ontario imports ,000 worth of bicycle frames from mercian bicycles in derby england. There will exist a ,000 credit recorded by mercian that offsets a ,000 debit at maple"s bank account. This will lead to a rise in the supply of dollars and the demand for british pounds. The balance of payments accounts are those that record all transactions between the residents of a country and residents of all foreign nations. They are composed of the following: the current account, the capital account, the official reserves account, statistical discrepancy. Includes all imports and exports of goods and services.
