This video teaches the concepts of Balance of Trade and Balance of Payments. The balance of trade is calculated by subtracting imports from exports. The balance of payments includes payments related to exports and imports of goods; payments related to the international flow of services, gifts or transfers; and payments for physical and financial assets such as rental payments or interest payments.

Key Concepts

Balance of Payments, Exchange Rate, Comparative Advantage, Benefit, Balance of Trade, Foreign Exchange Market, Trade

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