Balance of payments

4. This curve explains why a currency devaluation might worsen the trade balance before improving it
7. Direct refers to cross-border investment where an investor has a lasting interest in a foreign enterprise
12. Income earned by residents from their assets owned abroad (e.g., dividends)
13. A policy aimed at switching expenditure from foreign to domestic goods
14. If a country spends more than it earns in its Current Account, it must borrow from this account
16. Statistical is the "plug figure" used to ensure the BOP sums to zero
17. A situation where the total credits in the BOP exceed total debits
19. A trade occurs when a country imports more goods and services than it exports
20. A transaction that leads to an inflow of foreign currency (e.g., exporting rubber)

1. To correct a BOP deficit, a government might implement a policy to reduce domestic spending
2. Investment in foreign stocks and bonds without controlling interest
3. A record of all economic transactions between residents of a country and the rest of the world
5. The "Invisible Trade" part of the Current Account includes items like this
6. In the J-Curve, the trade balance worsens initially because import prices rise faster than these adjust
8. The account that records the sale and purchase of fixed assets like patents and copyrights
9. This sub-account includes worker remittances and grants
10. The net change in a country’s holdings of gold and foreign exchange
11. The export of electronic components is recorded as a credit in the Balance of this
15. This account tracks trade in goods, services, and primary income
18. An entry that represents an outflow of funds, such as paying for foreign insurance