ECONOMY TERMS: PART 2

TERMS PART 2: Trade & International Economics

• Balance of Payments (BoP) – Record of all transactions with the world.
  Example: Imports, exports, loans, remittances.
• Balance of Trade (BoT) – Difference between exports and imports of goods.
• Current Account – Trade in goods, services, income, transfers.
  Example: Exporting IT services to the US.
• Capital Account – Investments, loans, asset sales.
  Example: Foreign company buying Indian shares.
• Exchange Rate – Price of one currency in another.
  Example: $1 means ₹87.
• FDI – Foreign investment in factories or offices.
  Example: A car company building a plant in India.
• FPI – Foreign investment in shares and bonds.
  Example: A US investor buying Infosys shares.