Balance of payment is the record of value of all transactions with residents of one country to all other

countries in a given period of time. Two main parts of BOP:-

Current Account:- Measure of flow of funds from trade in guds & services and other income flows. Sub-
divided in three parts:-

1. Balance of trade in goods:- known as visible trade balance or balance of trade. Measure of
revenue received from exports of physical goods minus expenditure of exports on tangible
goods over given period of time. Trade from airplanes to chickens. Exports occur when leads to
inflow of money and imports when outflow of money to the country. When ecport revenue
greater thn import expendi, there is surplus on balance of trade and vice versa, deficit.
2. Balance of trade in services:-