The balance of payments summarises the economic transactions of an economy with the rest of the world. These transactions include exports and imports of goods, services and financial assets, along with transfer payments.
The balance of payments tracks international transactions. When funds go into a country, a credit is added to the balance of payments (BOP). When funds leave a country, a deduction is made.
For example, when a country exports 20 shiny red convertibles to another country, a credit is made in the balance of payments.
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