Balance of payments

Balance of Payments Essay The balance of payments is a record of proceeding between a country and the rest of the world. It is broken up into 2 different notices - the incumbent key and the capital and monetary accounting system. The current account is record of solely transactions australia has with former(a) countries with regards to goods/services, the income balance and current transfers. The income balance refers to profits bring in by Australian companies overseas, dividends earned by Australians overseas - which nuclear number 18 only credits and the debits are the very(prenominal) payments made to overseas residents in Australia. This is usually the biggest famine in the current account. Current transfers are one-way transfer of cash between Australia and rest of the world. Includes cash brought in by migrants, bills taken out by immigrants, foreign aid to development countries. The capital and financial account is a record of all borrowing and lendi ng transactions. Capital account is a nice small part of the capital and financial account. The financial account records all the transactions in assets and liabilities. 3 main internal representation role of financial account: Direct investment includes the lineal acquisition of entire firms. Portfolio investment is foreign companies acquiring shares in Australian firms. Reserve assets are the RBAs holdings of foreign currencies.

If there is a loss of reserves (the RBA sells Aussie currencies) it shows up as a appointed and vice versa. Causes of CAD Unfavourable terms of work: over the last few years A ustralian ancient products (exports) get d! own been falling in price slower than import fabricate goods. This causes a deficit in the balance of calling and and so a deficit in the current account. There has been a loss of international competitiveness due to Australias high labour costs relative to other countries. There has been an increase in house servant demand which... If you want to get a full essay, govern it on our website: OrderCustomPaper.com

If you want to get a full essay, visit our page: write my paper