00 to 1100 words essay. One of the more important measures in regard to international
economics is the balance of payments. Think of it as a national
accounting measure that looks at the flow of goods and services into and
out of an economy in a given period of time. It also shows capital
flows into and out of a country. Until 1980, the United States tended to
run a positive-to-neutral balance of payments position and was a
creditor nation. In the course of the past 30 years, the United States
has moved to a negative balance of payments and to being a debtor
nation.
Review and discuss the following:
- Discuss the importance of the balance of payments as an accounting measure.
- Discuss the current account and its components and the capital and financial accounts and their components.
- How important is the U.S. deficit in traded goods in regard to the balance of payments?
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