balance payment

• Balance of payments
• A measure of money inflows as well as outflows in the U.S. and the world.
• Three Accounts
• Current Account:
• Net Exports
• Exports give credit
• Imports give debit
• Net Foreign Income
• Income that is earned by foreign assets.
• Net Transfers
• Foreign aid
• Capital Account:
• This is the balance of capital ownership.
• Investments in the U.S.
• Purchase of financial assets by the foreigners.
• Official Reserves:
• Foreign currency holdings given by the Federal Reserve System.
• Balance of Goods and Services
• Goods exports +|- services exports - (goods imports + service imports)
• Balance on Current account
• Balance of good= services + net investment + net transfers.
• Official Reserves
• Current account  + Capital Account = 0