Pricing and Exchange Rates

37624One 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?

Here are some relevant articles to help you with this assignment:
The Changing Nature of the U.S. Balance of Payments-https://www.newyorkfed.org/medialibrary/media/research/current_issues/ci14-4.pdf
Balance of Payments-http://www.econlib.org/library/Enc/BalanceofPayments.html

References
Hellerstein, R., & Tille, C. (2008, June). The changing nature of the U.S. balance of payments. Current Issues in Economics and Finance, 14(4). Retrieved from https://www.newyorkfed.org/medialibrary/media/research/current_issues/ci14-4.pdf
Stein, H. (2008). Balance of payments. The Concise Encyclopedia of Economics. Retrieved from http://www.econlib.org/library/Enc/BalanceofPayments.html

Other Information

Instructions:
The Balance of Payments is one of the more important measures in regards to national economies and international flows of goods and capital. It is used to examine flows into and out of a country in regards to service, goods and capital (money). The goal is to develop and understanding of this important measure and what it can tell us about a national economy.