Balance of Payments ( 2 )

Assets or CREDITS ( + ) , Demand for $ , "Inflows"

• Current Accounts :
• Balance on Goods and Services
• Net Exports ( Xn )
• Balance of Trade
• Exports ; tourism Here ( ex : Disney World )
• Net Investments
• interest / dividend payments foreigners paid to U.S. for the use of exported capital
• Net Transfers
1. Aid to U.S.
2. Transfer back to U.S.
3. Royal ties 
• ex : wrote a song, but other people use it ( copyright )
• Capital / Financial Accounts :
1. Capital / Inflows
2. Direct investment in the U.S. by foreigners
3. Purchase of stocks and bonds by foreigners

• Official Reserves
1. Currencies
2. IMF ( international monetary funds ) Holdings
3. Gold

Liabilities or DEBITS ( - ) , Supply of $ , "Outflows"

• Current Accounts :
• Balance on Goods and Services
• Net Exports ( Xn )
• Balance of Trade
• Imports ; tourism There ( ex : Paris )
• Net Investments
• interest / dividend payments the U.S. made for the use of foreign capital invested in the U.S.
• Net Transfers
1. Aid to Them
2. Remittance from the U.S.
3. Their Royalties
• Capital / Financial Accounts :
1. Capital / Outflows
2. Direct investment in the U.S. over There
3. Purchase of stocks and bonds by the U.S.

• Official Reserves
1. Currencies
2. IMF ( international monetary funds ) Holdings
3. Gold

Balance Trade :

• goods and service EXPORT - goods and service IMPORT

Trade Deficit when balance on trade is negative :

• more import than export

Trade surplus occurs when balance of trade is positive :

• more export than import

Current Account :

• balance of trade + net investment + net transfer

Capital Account :

• foreign purchase of you country's asset + your country's purchase of assets abroad

Official Reserves ( ALWAYS POSITIVE )

• Current Account + Capital Account

Balance of Goods and Service :

• goods import + services import

Balance of Trade :

• goods export + goods import