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Teaching PowerPoints

4.2.6.3 - Balance of Payments (AQA A Level Economics Teaching Powerpoint)

Level:
A-Level
Board:
AQA

Last updated 16 Sept 2023

This teaching powerpoint covers the balance of payments.

Balance of payments is a way of looking at the economic transactions between a country and the rest of the world. It's like a big spreadsheet that tracks all of the money coming in (known as credits) and all of the money going out (known as debits) - things like exports, imports, tourism, investments, and more. When the debits and credits are added up, if they're equal, that's considered a "balanced" balance of payments. But if they're not equal, it's called an "unbalanced" balance of payments (yeah, it's a little confusing).

Here are the main components of the balance of payments:

  • Current Account: records transactions related to the exchange of goods, services, and income, like imports and exports.
  • Capital Account: tracks money coming in or out of a country through debt relief, and other capital transfers.
  • Financial Account: keeps track of changes in a country's foreign assets and liabilities.

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