What are the three components of the Balance of Payments? Explain the relationship between the Current Account and Financial Account. Why Balance of Payments should be equal to Zero on the long run? What is the logic in this?

Economics:
10th Edition
ISBN:9781285859460
Author:BOYES, William
Publisher:BOYES, William
Chapter6: An Introduction To The Foreign Exchange Market And The Balance Of Payments
Section: Chapter Questions
Problem 14E
icon
Related questions
Question

What are the three components of the Balance of Payments? Explain the relationship between the Current Account and Financial Account. Why Balance of Payments should be equal to Zero on the long run? What is the logic in this?

Expert Solution
steps

Step by step

Solved in 3 steps

Blurred answer
Knowledge Booster
Exchange Rate
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Recommended textbooks for you
Economics:
Economics:
Economics
ISBN:
9781285859460
Author:
BOYES, William
Publisher:
Cengage Learning
Principles of Economics 2e
Principles of Economics 2e
Economics
ISBN:
9781947172364
Author:
Steven A. Greenlaw; David Shapiro
Publisher:
OpenStax
Exploring Economics
Exploring Economics
Economics
ISBN:
9781544336329
Author:
Robert L. Sexton
Publisher:
SAGE Publications, Inc
Macroeconomics
Macroeconomics
Economics
ISBN:
9781337617390
Author:
Roger A. Arnold
Publisher:
Cengage Learning
Microeconomics
Microeconomics
Economics
ISBN:
9781337617406
Author:
Roger A. Arnold
Publisher:
Cengage Learning
Economics (MindTap Course List)
Economics (MindTap Course List)
Economics
ISBN:
9781337617383
Author:
Roger A. Arnold
Publisher:
Cengage Learning