4.2.6.3 - Balance of Payments (AQA A Level Economics Teaching Powerpoint)

This teaching powerpoint covers the balance of payments.

Balance of payments is a way of looking at the economic transactions between a country and the rest of the world. It's like a big spreadsheet that tracks all of the money coming in (known as credits) and all of the money going out (known as debits) - things like exports, imports, tourism, investments, and more. When the debits and credits are added up, if they're equal, that's considered a "balanced" balance of payments. But if they're not equal, it's called an "unbalanced" balance of payments (yeah, it's a little confusing).

Here are the main components of the balance of payments:

• Current Account: records transactions related to the exchange of goods, services, and income, like imports and exports.
• Capital Account: tracks money coming in or out of a country through debt relief, and other capital transfers.
• Financial Account: keeps track of changes in a country's foreign assets and liabilities.