Written by the Fiveable Content Team • Last updated September 2025
Written by the Fiveable Content Team • Last updated September 2025
Definition
The balance of payment is a comprehensive record of all economic transactions between the residents of a country and the rest of the world during a specific period. It includes trade in goods and services, capital flows, and financial transfers.
Related terms
Trade Deficit: This occurs when a country's imports exceed its exports, indicating it is buying more from abroad than it is selling.
Current Account: Part of the balance of payment that records trade in goods and services as well as earnings on investments.
Capital Account: This reflects net change in ownership of national assets and includes foreign investments and loans