1. What is meant by the balance of payments? In
what way is the balance of payments a summary
statement? What is meant by an international trans-
action? How is a resident of a nation deﬁned? In
what way is the time element involved in measuring
a nation’s balance of payments?
2. What is a credit transaction? a debit transaction?
Which are the broad categories of international
transactions classiﬁed as credits? as debits?
3. What is double-entry bookkeeping? Why does
double-entry bookkeeping usually involve an entry
called statistical discrepancy? How does such a sta-
tistical discrepancy arise?
4. What is meant by the current account? Did the
United States have a deﬁcit or a surplus in the cur-
rent account in 2011? What was its size?
5. What was the size of the net ﬁnancial outﬂows
(including U.S. ofﬁcial reserve assets) in 2011?
What was the size of the net ﬁnancial inﬂows to
the United States in 2011?
6. Why is the classiﬁcation of international ﬁnancial
ﬂows into short term and long term not stressed
anymore today as it was in the past?
7. How was the statistical discrepancy of (−) $89 bil-
lion for 2011 arrived at? By how much did U.S. ofﬁcial reserve assets change in 2011? By how
much did foreign ofﬁcial reserve assets change in
8. Which items does the ﬁnancial account in-
clude? What is meant by the autonomous transac-
tions? accommodating transactions? Which items
does the ofﬁcial reserve account include?
9. How is an ofﬁcial settlements deﬁcit or surplus
measured? What was the size of the U.S. balance
of payments in 2011?
10. What are the most serious pitfalls to avoid in ana-
lyzing a nation’s balance of payments or statements
of international transactions?
11. What were the cause and effect of the large U.S.
trade imbalance during the postwar period?
12. What is meant by the international investment
position of a nation, or its balance of interna-
tional indebtedness? What is its relationship to the
nation’s balance of payments?
13. What is the most important use of the statement of
the international investment position of a nation?
14. What are the beneﬁts and risks of the