International Business, 2nd Edition by Pearson

International Balance of Payments 157

INTRODUCTION

An international transaction involves two dierent

countries and is, therefore, in two dierent curren-

cies. These transactions occur in many dierent

forms over the course of a year. The measurement of

all international economic transactions between the

residents of a country and foreign residents is done with the help of a statement called the balance-of-

payments (BOP) account. Government policymakers need such measures of economic activity to evalu-

ate the general competitiveness of domestic industry,

to set exchange-rate or interest-rate policies or goals,

and for many other purposes. ...