What is a Countrys Balance of Payments?
When referring to the balance of payments for a given country, there are actually three slightly different scenarios that may be under consideration. While all three of the applications of this term have to do with financial transactions, the scope of the type of transactions may be narrow in some applications, and rather broad in others. Here are examples of the three usual ways that a country’s balance of payments is identified. One common reference to the balance of payments has to do with the financial transactions that occur during a specified period of time for a country. When used in this manner, the balance of accounts is concerned only with transactions that are classified as current account transactions. Basically, this means buying and selling of goods and services, as well as scheduled payments on outstanding indebtedness. The second application of this term may refer to not only the financial transactions conducted in the given period, but some of the long-term capital mov
