Hey, hoping someone could help me out on this!
We were taught in class that there are 3 components of the Balance of Payments:
Current Account (imports, exports, earnings from foreign investments)
Capital Account (very small, accounts transfer of money when migration happens)
Financial Account (FDI, portfolio investment, banking flows).
The vast majority of other resources I've seen (e.g. youtube videos) have all agreed with this, but the OCR textbook explicitly states that FDI is on the capital account (and makes no mention of the financial account anywhere in the book)
The exam's in a few days and I just can't get my head round this- is it because the textbook has simplified it into just two components of the BOP, or have we been taught wrongly?
Thanks for any help!
Balance of Payments components?? OCR A2 Economics watch
- Thread Starter
- 17-06-2016 17:16
- Official Rep
- 19-06-2016 18:30
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Just quoting in Puddles the Monkey so she can move the thread if needed
Spoiler:Show(Original post by Puddles the Monkey)