Copyright

Ch 2: The Balance of Payments in International Finance

About This Chapter

This chapter helps you quickly study the balance of payments in international finance through a series of short lessons and quizzes. You can use these resources to study for an upcoming finance exam, catch up in class, bring up your grades or simply improve your international finance knowledge.

The Balance of Payments in International Finance - Chapter Summary

Learn about the balance of payments in international finance with this self-paced chapter. This series of expertly taught finance lessons shows you essential information about the System of National Accounts, foreign trade measurements, trade balance, strategic trade policies and much more. If you have any questions about these concepts, you'll be able to submit them to our instructors online. Use any computer or mobile device to study, and be sure to take the accompanying self-assessments to make sure you fully understand the information. When you're finished with the chapter, you should be able to:

  • Explain how the System of National Accounts works
  • Describe the measurement of foreign trade
  • Recognize the components of financial, capital and current accounts
  • Discuss how trade balances are achieved
  • Evaluate the balance of payments and identify mechanisms that are used to adjust them
  • Interpret strategic trade policies and international trade policy
  • Summarize the history of modern U.S. trade relations

10 Lessons in Chapter 2: The Balance of Payments in International Finance
Test your knowledge with a 30-question chapter practice test
System of National Accounts & Balance of Payments

1. System of National Accounts & Balance of Payments

In this lesson, learn about the system of national accounts and the books dealing with international transactions: the balance of payments. Examine the common principles of both systems, and explore the main accounts in the balance of payments.

Balance of Payments with Financial Accounts: Measuring Foreign Trade

2. Balance of Payments with Financial Accounts: Measuring Foreign Trade

Learn about the balance of payments and the two key components that make it up. Discover what the financial/capital account is and how it relates to foreign trade and surpluses and deficits.

Financial Account: Components & Measurement

3. Financial Account: Components & Measurement

In this lesson, learn about a country's financial account. Identify its components and main subaccounts, and examine how this account is measured. Also, explore the differences between a financial account and a capital and a current account.

Capital Account: Components & Measurement

4. Capital Account: Components & Measurement

In this lesson, you'll learn about one of the three main accounts of a country's balance of payments: the capital account. We'll identify its components, explain how to measure it and explore the differences between capital, financial and current accounts.

Achieving Trade Balance: Trade Deficit and Surplus Examples

5. Achieving Trade Balance: Trade Deficit and Surplus Examples

Find out what trade balance, trade deficit, and trade surplus are. Learn about some recent examples that help clarify trade deficit and surplus. Explore what countries have a surplus and what countries have a deficit.

Balance of Payments: Current Account & Measuring Foreign Trade

6. Balance of Payments: Current Account & Measuring Foreign Trade

Find out what the current account is and the four main foreign trade components that it is comprised of. Similar to your bank account, learn how the current account is measured and what a deficit and surplus mean when talking about this economic indicator.

What Is a Current Account? - Definition & Examples

7. What Is a Current Account? - Definition & Examples

Every country that trades with another country, has an account that they use to keep track of trade in goods, services, money received from investments, and money donated. In this lesson, we will learn more about current accounts and look at some examples.

Mechanisms for Adjusting Balance of Payments

8. Mechanisms for Adjusting Balance of Payments

In this lesson, examine the different mechanisms that countries can use to correct imbalances in the balance of payments, including the adjustment of exchange rates, the adjustment of internal prices, and the rules-based adjustment.

International Trade Policy & Strategic Trade Policies

9. International Trade Policy & Strategic Trade Policies

Governments sometimes intervene in international trade. In this lesson, we'll examine the arguments against strategic trade policy and discuss the policy instruments used by governments to influence international trade flows.

Modern History of U.S. Trade Relations

10. Modern History of U.S. Trade Relations

Since 1934, the United States has progressed from a protectionist stance towards trade to the globalized free trade we know today. We will cover some landmark legislation along the way as well as discuss the current trade deficits.

Chapter Practice Exam
Test your knowledge of this chapter with a 30 question practice chapter exam.
Not Taken
Practice Final Exam
Test your knowledge of the entire course with a 50 question practice final exam.
Not Taken

Earning College Credit

Did you know… We have over 160 college courses that prepare you to earn credit by exam that is accepted by over 1,500 colleges and universities. You can test out of the first two years of college and save thousands off your degree. Anyone can earn credit-by-exam regardless of age or education level.

To learn more, visit our Earning Credit Page

Transferring credit to the school of your choice

Not sure what college you want to attend yet? Study.com has thousands of articles about every imaginable degree, area of study and career path that can help you find the school that's right for you.

Support