The current account consists of the goods balance gb, the service balance. Textbook economic theory suggests that a current account surplus is a. Cia fact book of account rankings worldwide current account surplus. Bop on current account is a statement of actual receipts and payments in. In economics, a countrys current account is one of the two components of its balance of. Dear students on request of many students, i have compiled a formula sheet that will come in handy for learningrevising all the important formulas used in economics. And current account deficit is a result of current account imbalance.
Please note that it is important that you memorize all formulas as they are often needed to solve mcqs. X is the export of goods and m is the import of goods. Hi everyone, here is a formula sheet i made of all the formulas used in hsc economics. Imf, balance of payments manual, fifth edition, 1993, p. A countrys current account can be calculated by the following formula. Financial economics, and the calculations of time and uncertainty derived from it, are playing an increasingly important role in nonfinance areas, such as monetary and environmental economics. Current account balance refers to the net of these flows. An implication of the doubleentry bookkeeping methodology is that. The current account and macroeconomic adjustment in the. The current account of the balance of payments includes a countrys key activity, such as capital markets and services.
Cab will tell whether a country is in a surplus or deficit. These formulas are often used in the multiple choice section of the economics paper. Ib economics paper 3 revision booklet teaching resources. Economics unit 3 formula sheet average revenue ar price p tr output marginal cost mc n of n th unit total cost of n units total cost of n1 units tc n. Revision activities for paper 3 ib economics, including linear equations, unemployment, inflation, gdp, comparative and absolute advantage and theory of a firm calculations. By definition, the current account balance also corresponds to the. Francesco parisi of essays by leading scholars who draw on the insights of law and economics and rational choice theories more broadly, and. The author of the big short on trumps war on experts and why it would take a pandemic to remind americans of the importance of good governance. The current account reflects the value of the flow of goods, services, income and gifts between the home country and the foreign countries.
The balance of payments bop is the place where countries record their monetary transactions with the rest of the world. Econ 205 cheat sheet statistics for business and economics descriptive statistics. When it was talking about the current account balance, the book referred to it as a balance between national savings and national investment, but i dont quite understand this. The exports and imports include both goods and services. An open economy is one that trades with other nations in goods and services. The current account records exports and imports in goods and services and. Roubini at the moment and i dont get some stuff in the book. Please note that the objective of this formula sheet. Chapter 12 the balance of payments and the exchange rate. For trade balance to be positive a country needs to have more exports than imports. Here is a definition of transactions in the bop by the international monetary fund imf transactions, for. If figuring the cpi, would use this formula and multiply result by 100. Buy truemans ugc net economics book online at low prices. The current account balance and national income account.
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