Balance of payments: A record of all economic transactions between residents of a country and the rest of the world, consisting of the current account and the financial (capital) account.
How to apply it: Explain that the current account plus the financial account must sum to zero (balance), so a current account deficit implies a financial account surplus.
Course: AP Macroeconomics · Unit: Open Economy: International Trade and Finance
Practice questions about Balance of payments on AimFive — get rubric-based feedback showing exactly which points you earned.
AP and Advanced Placement are trademarks of College Board. AimFive is not affiliated with or endorsed by College Board.