Capital Account
Definition
The capital account is part of a country's balance of payments that measures the flow of financial assets into or out of a country. It includes investments in physical assets like real estate or machinery, as well as financial assets like stocks or bonds.
Related terms
Foreign Direct Investment (FDI): Investments made by individuals or companies from one country into businesses located in another country.
Portfolio Investment: Investments made in financial instruments such as stocks, bonds, or mutual funds issued by foreign entities.
Official Reserves: Foreign currency reserves held by central banks to stabilize their own currency value and manage international trade flows.
"Capital Account" appears in:
Additional resources (1)
AP Macroeconomics - Unit 6 Overview: Open Economy-International Trade and Finance
Practice Questions (3)
What does the capital account of the balance of payments measure?
Which type of investment is included in the capital account?
What does the capital account of the balance of payments measure?
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Resources
Cram Mode
AP Score Calculators
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Help Center
© 2024 Fiveable Inc. All rights reserved.
AP® and SAT® are trademarks registered by the College Board, which is not affiliated with, and does not endorse this website.