Question

Name two items of financial account of the balance of payments​

Answer 1

Two major items in the balance of payments accounts are:

1. Current account - Includes trade balance, net income from abroad, net current transfers. Shows balance of exports vs imports of goods and services.
2. Capital account - Records international transactions related to non-produced assets. Includes capital transfers, capital income, capital grants. Captures the net inflow or outflow of finance and investment.

So the balance of payments aims to track the overall financial transactions between a nation's residents and the rest of the world. The current account and capital account are the main components that make up the balance of payments.