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Lesson Flashcards: International Economic Relations and Balance of Payment Accounts Economics

The BOP current account

A summary of a country’s income from transactions with other nations and a part of the BOP accounts document

BOP primary income

International payments recorded as debits or credits relating to investments, such as stock dividends, or bond coupon payments, also known as BOP investment income

Economic aid for development

Loans from international organizations to help developing countries achieve economic growth

Direct investment

A category of investment in which investors take a major (larger than 10%) stake in a foreign firm

International short-term loans

Loans with a term of less than one year used to settle deficit and surplus in international trade

Portfolio investment

A category of investment in which investors take a minor stake (10% or less) in a foreign firm

Capital transfers

Monetary movements involving a change in the ownership of assets or obligations (liabilities)

International trade

The transactions of goods or services between countries

Balance of payment (BOP) accounts

A document that lists all of the financial dealings that a country has with other countries and whose main components are current account and capital account, which are usually reported on a quarterly basis and summarized annually

BOP secondary income

International transfer payments made without expecting anything in return, such as international grants or subsidies or workers abroad sending money home to their families (worker remittances)

International medium-to-long-term loans

Loans with a term of over one year, which are capital transfers intended for investment, used to finance developments of firms abroad

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