Question

Which of the following is the system of accounts that records international financial transactions?

1) gatt
2) wto
3) balance of payments
4) net import account
5) none of the above

Answer 1

The balance of payments is the system of accounts that records international financial transactions, including the balance of trade and current account balance.

Step-by-step explanation:

The system of accounts that records international financial transactions is known as the balance of payments. The balance of trade is closely related to the balance of payments, in that it reflects the gap between a nation's exports and imports. The current account balance is a broader measure which includes not only the merchandise trade balance but also trade in services, income flows from investments abroad, and unilateral transfers such as foreign aid or remittances. Both the balance of trade and the balance of payments help in understanding the economic transactions a country engages in with the rest of the world.