Define balance of payment BOP How the BOP can be determined-00562
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THE BALANCE OF PAYMENTS (BOP):
BOP is an accounting record of a country's transactions with the rest of the world.
The balance of payments (or BOP) measures the payments that flow between any individual country and all other countries. It is used to summarize all international economic transactions for that country during a specific time period, usually a year.
The BOP is determined by the country's exports and imports of goods, services, and financial capital, as well as financial transfers. It reflects all payments and liabilities to foreigners (debits) and all payments and obligations received from foreigners (credits).
Balance of payments is one of the major indicators of a country's status in international trade, with net capital outflow.
