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Components of the Balance-of-Payment

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A nation's balance-of-payment can be grouped into several categories. List and describe these categories.

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Solution Summary

The categories included within a nation's balance-of-payment, as well as their descriptions.

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The balance of payments is a summary statement of a country's payments and debts to foreign countries and the receipts and credits received from foreign countries for a specified period, generally one year. The Balance of Payments (BoP) can be represented with this equation: Current Account Balance + Capital Account Balance + Balancing item = 0.

The BoP is expected to sum to zero as any deficit in one account would be ...

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