Balance of payments: Current account | Foreign exchange and trade | Macroeconomics | Khan Academy

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Understanding the United States Current Account in 2011
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Macroeconomics on Khan Academy: Topics covered in a traditional college level introductory macroeconomics course
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[@Andrei118]

How does this man have so much knowledge in so many different subjects?

[@choiprod]

a testament to the importance of developing a strong foundation in mathematics

[@youdontknow8286]

Same dude i thought about it too

[@atithumagainn1243]

The question is not 'how,' the question is 'why.'

[@Andrei118]

@@atithumagainn1243 I think both are valid questions... If you want to get philosophical, the 'why' is the motivation behind the 'how' but it does not explain the 'how'.

[@Raysliquidity]

He must have developed a passion for learning in order to be able to spread that knowledge to others. Hard work and persistence over many many years, with a driving passion to do good for the world. Much respect to Sal!

[@sakibalhasan7847]

This guy is a genius and his family hailed from a village of the Barisal District 😊 So proud of him 🇧🇩

[@erwin8181]

thanks bro !!! now my level in international eco with gentillu is much better

[@rrentboy]

exam tomorrow: saver! Thanks !

[@abmhd5670]

Exactly...!!! Same for me also..!!

[@rishabh5750]

mines in 10 minutes lol

[@timtam3730]

@@rishabh5750 Me, who's giving in my first draft for an assignment due in three weeks: Can't relate. 😎

[@margretmundu]

May you please do a clear video also the writings please thankyou❤

[@Thegamemakur]

Finally a new video!!!!

[@outrageous5468]

So the net transfers would be seen as an inflow on the current account if the inflows in transfers were greater than outflows? Meaning that the US sends more money in the form of transfers out of the country than they receive? Great vid by the way, THANK YOU SO FREAKING MUCH!

[@i.emredogan1495]

I have question : What determines whether a small open economy will have a trade surplus or a trade deficit? can someone explain please?

[@haonayba6184]

Depends on Exchange rates. If smol country exchange rate depreciates (weakens) against rest of world, it costs more to buy foreign goods. This means that the people of the small country will spend more money on home goods instead of foreign goods. This means imports increase. What happened to exports? Because the currency of the small country depreciated, its goods become cheaper for foreign countries. The small country can therefore increase its exports, as there is greater demand for them. Trade balance is exports - imports. There was a decrease in imports and an increase in exports so trade balance increased. Hope this helped. Trade balance also depends on changes in real income and other factors.

[@Yuppp-sq1qi]

@@haonayba6184thank uuu🙏

[@coraliesw3626]

Thank you so much

[@ChizzMikNik]

Thankyou Thankyou Thankyou Thankyou Thankyou Thankyou

[@angelarienagaoka1268]

What kind of results will occur in relation to the current account balance and foreign currency if exports related to natural resources increase sharply?

[@mre5807]

I do not get why the BoP has to balance - I'm pretty confused. For instance, let's say NX are positive; that means there is money coming into the economy via Exports (more so than has left through Imports). Why not just spend that money on stuff in our economy? Why does it have to back out through the Capital Account?

[@admcdoug]

think about it this way: lets say the U.S. has a CA surplus with Canada. That means Canada is some how importing more than it's exporting. How can Canada afford that? The only way is that there is some other money coming into Canada, such as foreign investments from the U.S., which show up as a plus in the capital account.

[@mre5807]

Alex McDougall Thanks but couldn't Canada just dig into some of their consumption/savings from elsewhere to fund the imports? And from what you've said the causality runs: capital account surplus implies a current account deficit? Is that correct? In other words, if a country wants to do more importing, they have to borrow more (KA surplus), only then can they have a CA deficit (importing)?

[@admcdoug]

Mr E Exactly. Another good example: US/China - U.S., huge CA deficit; China, huge surplus. How? China purchases U.S. debt securities and currency (ie. KA deficit for China, KA surplus for U.S.). Good question - can you fund imports in other ways? I think the the issue is that importing countries need foreign exchange - which is acquired by exporting. So if Canada wants to buy something from the U.S., the Canadian needs U.S. dollars, which can only come from the U.S through either the CA or the KA.

[@mre5807]

Alex McDougall Awesome, thank you! Last question is about repayments on loans. Let's say I (and I'm a country here) owe you (you're also a country) £100 but perhaps you need it in $ (because let's suppose you're American). How would this trade proceed if no one is willing to buy £s in exchange for dollars? (i.e. no one wants to buy my exports or lend me money)

[@ohedd]

You buy the money at the prevailing exchange rate. If nobody wants your money at a certain exchange rate then it means your money is too expensive, and you lower the price of £ until the price is right.

[@dusski1]

where did u get that calculator? where and can i get it and do i have to pay? great videos, recently subscribed and it's great to watch these videos :)

[@marijamaric6182]

Well thank you!

[@josesantos5065]

Awesome explanation.

[@shivjee8043]

Good 👍

[@humaas9413]

Which balance of payment deals with interest earned or paid on claims.....please answer...i need it urgently

[@florianarnout5156]

Nice video ! Thank you :)

[@HotPepperLala]

Our government needs to watch this video lol, maybe they could something from this

[@dorjderemnamsraijav5182]

What is net income flow?

[@bubbles-bs6ny]

can someone please explain why current account will decrease if inflation is high

[@AnkitGupta-ll6mz]

If inflation is high in your country the value of your currency depletes. Now, if you wants to import from other countries then you need to pay more than what you used to pay as your currency value is deprecated due to inflation so, either you will refrain from importing or will import less. While for a foreigner the goods of your country has become cheap as your currency value has become low so he will import from your country. Your country export increases. So, increase in your country export and decrease in your import will decrease your country's current account defecit.

[@aminathsaeeda6176]

Could you do one for the receipt and payment account?

[@christianstojgtr]

what does it mean if current account surplus is 0% of gdp?

[@M.Ghilas]

I think it means there's a balance:( Exports+Income receipts)-(Imports+Income payments)=0

[@notyourechochamber3137]

its amazing how the `dahhlar`still commands respect around the world.

[@zy2870]

So essentially current account refers to the balance of direct inbound and outbound payments or transfers

[@harshpatel7041]

FANTASTIC

[@RogueLawyer666]

Can someone help me out on this one, it's pretty urgent and I don't have a single idea what it means. For e.g. if say China has a big NX of $5bn (NX>$0), but a small capital account. Therefore they have a positive BOP of $5bn. Thus they have a outflow of funds of -$5bn (change in KA is -$5bn to balance the BOP) 1. So what does it mean by a small capital account yet they have a huge outflow of funds (sizeable change in capital account)?? 2. Won't that means now they have a huge capital account now after the change even if they have a small capital account from the start?

[@seller6478]

THANKYOU

[@thomasplanell836]

USA having current account deficit means that $474B dollars have to be traded for their equivalent in one's foreign currency. So Current account deficit lowers USD rate against such foreign currency while a Current Account Surplus would require foreigners to trade their currency for USD in order to honor their payments. Right?

[@francisvl8895]

😊. .. 0:08

[@Morris91Music]

As a US citizen earning income from my job abroad and I repatriate my earnings back home, is that a credit to the US income account? or to net transfers?

[@dusski1]

thanks :)

[@LongDefiant]

A bloodless description of how the world is dominated.

[@manasviigoel]

by who?

[@LongDefiant]

@@manasviigoel aided by people who ask these types of questions

[@manasviigoel]

@@LongDefiant hmm

[@ezinneechukwu942]

Ye

[@angelaxu6673]

Hi your video is really good. What software did you use to make it?

[@rodrigolunaortega3741]

Anyone twenty twenty one

[@kimchhoeu1638]

2022

[@flamy6905]

Thanks mannnn!!! Ly ⭕

[@aalhuss]

A+ keep it up

[@imranahussnain2322]

Why only usa why isnt other countries that develop

[@rob11s]

How do you use this calculator in your computer?

[@aymaanahamed6634]

you search umm rick roll and watch the first video then you see how to enable the calculator

[@manasviigoel]

@@aymaanahamed6634 the person literally asked that question 10 years back lmao

[@CreeperD-ho5it]

Anyone 2024 😂

[@ksenia6637]

Why can't I help my dad instead of my mom?? lol

[@notdie3573]

It's red 😡

[@Elvishyadav_774]

Nashe baaz