The Balance of Payments

[@thisisnotmyrealname6046]

Most helpful video I found on this topic

[@himavanthbojanki5332]

U are doing great❤☺.... All the best

[@khadeejahfalih9047]

your video has helped me a lot!! tysm!!

[@riazkhan6249]

great job... upload more videos

[@N1xnm]

This video was extremely insightful and deeply developed my comprehensive understanding of the balance of payments as it relates to economics.

[@harrystyles4688]

please post more videos, your videos are helping me alot.

[@teagan670]

that was so helpful!

[@priyojitdas1779]

What if balance of payment is not zero?? That goes negetive??

[@sharengonsalves4451]

Balance of payment must be zero. If it is any other number than it is a statistical discrepancy or mistake in calculation.

[@Kushagra_kanwal]

It always balances out because it is just an accounting exercise. There is a column called "Errors and Omissions", whatever surplus or deficit is there, it gets adjusted there. That is why the sum is always zero.

[@xXMoneyLensXx]

I am sorry, but I am still confused about this issue. The specific issue for me is that I don't get why the export surplus has to be due to financial investments (or, as investopedia says, "borrowing money from foreign lenders or permitting foreign investment in U.S. assets")? Is it not possible that a country pays for the trade deficit with its own money? A) If the answer is yes, but that this money counts as an export because of double book accounting (any exchange goes both ways, so import of goods = export of money), how come investopedia and every other site writes that a country needs "borrowing money from foreign lenders or permitting foreign investment in U.S. assets" to pay for a trade imbalance? I mean, couldn't they just pay with their own money?

[@Kushagra_kanwal]

A country can print only it's own currency. That's why they need to have Capital Account Surplus to offset Current Account Deficit because Global trade happens in US Dollars. Only USA can pay for it's trade deficit in it's own money i.e. US Dollars. But they don't do that because if they do so, it will increase money supply and cause inflation. When the entire world is investing in US and financing their current account deficit, there is no need to print more money.

[@Kushagra_kanwal]

I hope I was able to explain properly.

[@Mortum_Rex]

These days it's important to mention the big black elephant in the room too, i.e, offshore accounts. The "errors and omissions" are running in the trillions now.

[@surajtp1951]

what is KAFA?

[@Kushagra_kanwal]

Short form of Capital Account Financial Account

[@surajtp1951]

@@Kushagra_kanwal Thank you but what does 'K' stands for? if Capital account then it should be 'C'? correct me if iam wrong

[@Kushagra_kanwal]

@@surajtp1951 Yes it should be so, but conventionally CA means Current Account. So, to avoid confusion we use KAFA. 'K' is used in place of 'C' because of similar pronunciation.