Credits VS.Debits
- Credits - additions to a nations account
- Debits - subtractions to a nations account
How To Calculate the Following
Balance on trade
- (Merchandise + service export)-(merchandise + service imports)
- Trade deficit occurs when the balance on trade is negative (imports>exports)
- Trade surplus occurs when the balance on trade is positive
Balance on Current Account
- (Balance on trade(exports + imports)) + Net Investment Income + Transfer Payments
- Official Reserves
- Nationally
- ^CA + ^FA + ^Official Reserves = 0
