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The Balance of Payments is defined as a record of
transactions in goods, services and capital or money between residents of a
country and those of the rest of the world, over a specified period of time,
usually a calendar year. The composition of these accounts are current
accounts, capital accounts and official settlement balance.
This is an indication of the quality of life of the
people of a country and how that is changing from one year to another. It
refers to how much can be bought with a person’s net income. (That is
income after deductions for income tax etc.).
This index is constructed by
taking the total value of a collection of items purchased by a typical consumer
in a particular year, which is referred to as a ‘base year’.
That year is given a value of say 100. The same items are valued periodically
(e.g. annually) and the general price movements can be compared relative to the
prices of the items in the base year, and plotted on a graph. This gives
an indication of whether prices have risen or fallen depending on whether each
new plotted position is above or below the base line.
The CPI consist of the prices of goods and services
purchased by consumers. It is one of the indices used to measure the
cost of living.
The human science which studies the relationship between
scarce resources and the various uses which compete for these resources.
Essentially economics determines what goods and services to produce, how to
produce them and for whom to produce them.
Globalisation is the process that increases the social,
economic, cultural and political relationship between countries across the world
led by international trade. This relationship results in local events
being shaped by events occurring thousands of miles away.
The total value of output and production of all the
resources within the borders of a country is termed the Gross Domestic Product
(GDP).
The total value of the output of the resources owned by
residents of a county wherever these resources are situated inside or outside
the borders of the country
Inflation occurs when prices are constantly rising and
the real value of money or its purchasing power is falling. This results
in a rise in cost of living. If it is not matched by an increase in
salaries and income of workers they will then experience a fall in the standard
of living.
What exactly is money? Essentially money is
anything that is generally acceptable by the public as a medium of exchange or a
means of payment. Historically many different things were used as money.
For some people in the not too distant past, it was feathers, stones, beads,
bangles and shells, for these were the objects that were considered
valuable. Today it is coins, banknotes, plastic cards, credit cards, debit cards
and savings in the bank.
Net International Reserves are the Inflow of foreign
currencies minus the outflow of foreign currencies.
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