balance of international payments

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Explanation of "Balance of International Payments"

Definition:
The "balance of international payments" is a way to keep track of all the money that comes in and goes out of a country from buying and selling goods, services, and investments with other countries over the course of a year.

Usage Instructions:

• Use this term when discussing a country's economic relationships with other nations.
• It is often used in economics and finance contexts.

Example:

• "In 2022, the country's balance of international payments showed a surplus, meaning it received more money from exports than it paid for imports."

Advanced Usage:

• Economists analyze the balance of international payments to understand a country's economic health.
• A country with a consistent deficit in its balance of payments may need to take steps to improve its economy.

Word Variants:

• Balance of Payments (BOP): This is a shorter form of the same term and is commonly used interchangeably.
• Surplus: When more money comes in than goes out, it’s called a surplus in the balance of payments.
• Deficit: When more money goes out than comes in, it’s referred to as a deficit in the balance of payments.

Different Meanings:

• In a general sense, "balance" can also refer to being equal or fair in various contexts, such as balancing work and life.
• "Payments" can refer to any type of financial transaction, not just international ones.

Synonyms:

• International financial statement
• External account balance
• Trade balance (though this usually refers only to trade in goods and services)

Idioms:

• "In the red" means spending more than what is earned, similar to having a deficit in the balance of payments.
• "In the black" means earning more than what is spent, similar to having a surplus.

Phrasal Verbs:

• Pay off: to settle a debt, which can contribute to the balance of payments.
• Bring in: to generate income from exports that positively affects the balance of payments.

Conclusion:

Understanding the balance of international payments is important for grasping how countries interact economically. It helps to see if a country is doing well in trade and finance with the rest of the world.

Academic

Noun

1. a system of recording all of a country's economic transactions with the rest of the world over a period of one year
   • a favorable balance of payments exists when more payments are coming in than going out

Synonyms

• balance of payments