These formulas are often used in the multiple choice section of the economics paper. By definition, the current account balance also corresponds to the. A countrys current account can be calculated by the following formula. Economics unit 3 formula sheet average revenue ar price p tr output marginal cost mc n of n th unit total cost of n units total cost of n1 units tc n. Roubini at the moment and i dont get some stuff in the book. The current account reflects the value of the flow of goods, services, income and gifts between the home country and the foreign countries. Revision activities for paper 3 ib economics, including linear equations, unemployment, inflation, gdp, comparative and absolute advantage and theory of a firm calculations. An open economy is one that trades with other nations in goods and services. Financial economics, and the calculations of time and uncertainty derived from it, are playing an increasingly important role in nonfinance areas, such as monetary and environmental economics. The balance of payments bop is the place where countries record their monetary transactions with the rest of the world.
The current account records exports and imports in goods and services and. Cab will tell whether a country is in a surplus or deficit. This equation states that a countrys initial net foreign asset position in. The current account balance and national income account. Imf, balance of payments manual, fifth edition, 1993, p.
If figuring the cpi, would use this formula and multiply result by 100. Please note that it is important that you memorize all formulas as they are often needed to solve mcqs. Dear students on request of many students, i have compiled a formula sheet that will come in handy for learningrevising all the important formulas used in economics. Buy truemans ugc net economics book online at low prices.
The current account of the balance of payments includes a countrys key activity, such as capital markets and services. Econ 205 cheat sheet statistics for business and economics descriptive statistics. In economics, a countrys current account is one of the two components of its balance of. Hi everyone, here is a formula sheet i made of all the formulas used in hsc economics. The exports and imports include both goods and services.
For trade balance to be positive a country needs to have more exports than imports. An implication of the doubleentry bookkeeping methodology is that. Textbook economic theory suggests that a current account surplus is a. Ib economics paper 3 revision booklet teaching resources. Cia fact book of account rankings worldwide current account surplus. Chapter 12 the balance of payments and the exchange rate. The current account consists of the goods balance gb, the service balance. X is the export of goods and m is the import of goods. Please note that the objective of this formula sheet. Current account balance refers to the net of these flows. When it was talking about the current account balance, the book referred to it as a balance between national savings and national investment, but i dont quite understand this. And current account deficit is a result of current account imbalance. Here is a definition of transactions in the bop by the international monetary fund imf transactions, for. Bop on current account is a statement of actual receipts and payments in.
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