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Balance of Payments (BOP) (Political Science)
A state ment that reflects a country's international transactions and balances the amount of money flowing in and out of a given country. The BOP reflects activity in both the public and the private sectors of a state's economy. When money flows into a country, it is known as credit; when money flows out of a country, it is known as debit. Ideally, the credits and the debits should balance (equal zero), but this is rare. The BOP is divided into three major parts: (1) current account, (2) capital account, and (3) financial account. The current account refers to the funds related to goods and services flowing in and out of the country. The capital account records international capital transfers; this category includes nonfinancial and ...