How are debits and credits defined in international transactions?
The BP is often divided into three sections: current account, capital account, and financing method (deficit or surplus). A simplified table is as follows: I. Current account A. Merchandise 1. Exports (+) 2 Imports (-) B. Services 1. Military (net) 2. Travel and transportation (net) 3. Investment income (net) Balance of goods and services = A + B C. Unilateral transfers 1. Government grants (excluding military) 2. Remittances and pensions Balance on current account = A + B + C II. Capital account D. Long-term capital movements or flows E. Short-term capital movements or flows Official reserve transactions balance = A + B + C + D + E The line______________________________________ (There is some debate about where to draw the line to determine the balance of payments surplus or deficit. Some economists draw the line after long-term capital movements but before short-term capital movements, since short-term assets are temporary and can be withdrawn at a moments notice.) III. Financing (de
