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Balance of Payments
A record of payments between one country and the rest of the world
The current account
A record of trade in goods, services and also investment income and transfers.
A current account surplus
When more money flows in from exports than flows out from imports.
A current account deficit
When more money flows out from imports than flows in from exports.
Trade in goods
A measure of the movement of tangible products across borders
Trade in services
A measure of the movement of intangibles output across borders
Investment incomes
A measure of interest, profit and dividends earned in another country.
Transfers
Movements of funds for which there is no corresponding trade in goods and services e.g. economic migrants sending money back to their families (remittances)
Appreciation
This is when the pound becomes stronger and can be used to purchase an increased amount of another countries currency (good for importers).
Depreciation
This is when the pound becomes weaker and does not purchase as much of another country's currency as before (good for exporters).
Productivity
A measure of output per worker. High productivity rates can reduce costs and make goods more competitive internationally.
Devaluation
When a country actively manages its currency to make it lower (by selling its own currency and buying others aka 'open-market operations'.
