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Role of International Trade

Author: Kate Eskra
Video Transcript
Terms to Know
Balance of Payments

A record of all monetary transactions that flow across a country’s border; two major components are the current account and the capital account.

Capital Account

Captures investment and financing flows; inflows have an appreciating impact on a given currency; outflows have the opposite, or depreciating, impact.

Current Account

Represents the sum of all recorded transactions including traded goods, services, income, and net transfer payments.

Deficit

Shortages that result from spending in excess of revenue.