Balance of Payments of The United States comprises three accounts namely: current account, a financial and capital account. Current account details international trade and net domestic income as well as direct payments made to The United States whereas the financial account represents variation in international asset accumulation. Lastly, the capital account as the name suggests numerous financial transactions that do not affect economic output. These records are of essentiality to the country as it enables determine if the country is capable of sustaining the consumption of imports as well as stabilize the country’s economy. Balance of payment also illustrates country’s contribution to the world output, if it is a net consumer or a net producer. Net consumers are those countries with balance of payments deficit such that they import more than they export. They are hereby dependent on the aids and grants to run their economy. This type of economy leads to poverty and gradual economic growth.
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