What are the main components of Balance of Payments (BoP)? Discuss the factors affecting the BoP

                                                                                                                                

MBA

Business Environment

ASSIGNMENT

 

Course Code: MMPC-003

Assignment Code: MMPC-003/TMA/JULY/2022 

Coverage : All Blocks

5. What are the main components of Balance of Payments (BoP)? Discuss the factors affecting the BoP.

Balance of Payments (BoP) is a record of all transactions between a country and the rest of the world over a period of time. The BoP consists of three main components: the current account, the capital account, and the financial account. In this article, we will discuss these components and the factors that affect the BoP. Components of Balance of Payments Current Account The current account measures the balance of trade in goods and services, income, and transfers between a country and the rest of the world. It includes the following sub-components:

Trade in goods: This includes exports and imports of goods such as raw materials, finished goods, and consumer products. Trade in services: This includes exports and imports of services such as tourism, transportation, and financial services. Income: This includes earnings on investments and labor, such as dividends and salaries paid to foreign workers. Transfers: This includes remittances, aid, and other transfers between countries.

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