Quezi, an East Asian country, borrows $300 million from Muranico, a North American country, to fund its infrastructure projects. Quezi exports petroleum worth $700 million to Muranico and other countries. Besides this, Quezi provides foreign aid worth $40 million. In this scenario, this flow of money into and out of Quezi can be measured by _____.

Question

Quizplus · Accepted Answer

The flow of money into and out of a country is measured by its balance of payments. Balance of payments records all the financial transactions between a country and the rest of the world during a given period, including imports, exports, foreign aid, and investments. The balance of trade only measures the difference between the value of a country's exports and imports of goods, while articles of organization are documents that establish a business entity, and opportunity cost is the cost of the best alternative foregone.

Quezi, an East Asian Country, Borrows $300 Million from Muranico