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Balance of payments GapFill
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The balance of payments is the measurement of a country's annual income and outgoings relative to the rest of the world. There are a number of different economic flows which combine to produce the balance of payments, and it is important to be able to distinguish between them.
The primary measures of exchange within the balance of payments produce the current account. This consists firstly of , which measures the value of exports minus the value of imports. Secondly, earned by citizens who own assets abroad, minus the value generated from foreign-owned domestic assets. Examples of such assets could be properties or business investments. Thirdly, of money received from foreign governments, minus money paid out to foreign governments. Examples of this could be money the UK receives from the EU, or money the UK pays out to foreign governments in the form of .
Another contributor to the balance of payments is , which represents exchanges in the ownership of assets.
The final contributor to the balance of payments is the financial account. This consists firstly of into the country by a foreign investor, minus domestic investment into a foreign country. Secondly, , which measures flows of : investments that may have debts or other liabilities attached to them. Thirdly, , which measures the flows of financial products that are attached to assets, such as options and futures. Finally, the value of which are held in the UK by and in other countries by their respective monetary authorities. These include national gold stockpiles, or national possession of foreign currencies.