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Balance of Payment Balance of payment : Meaning andcomponenets Meaning  :- The balance of payment of a country is a systematic record of all economic transactions between the residents of the reporting country and the residents of foreign countries during a given period of time Balance of trade and balance of payment  :- Balance of trade takes into account only those transactions arising out of the exports and imports of goods(the visible items).It does not consider the exchange of services rendered such as shipping. Balance of payments takes into account the exchange of both visible and invisible items. Hence, the balance of payments represents a better picture of a country’s economic transactions with the rest of the world than the Balance of Trade. Structure of Balance of Payments Accounts  :- A Balance of payments statements is a summary of a nation’s total economic transactions undertaken on international account. It is usually composed of two...

What Is Fiscal Policy? Types, Objectives and Tools Definition:  Fiscal policy is the government spending and taxation that influences the economy. Elected officials should coordinate with  monetary policy  to create  healthy economic growth . They usually don't. Why? Fiscal policy reflects the priorities of individual lawmakers. They focus on the needs of their constituencies. These local needs overrule national economic priorities. As a result, fiscal policy is hotly debated, whether at the federal, state, county or municipal level. Types of Fiscal Policy There are two types of fiscal policy. The first, and most widely-used, is  expansionary . It stimulates economic growth. It's most critical at the  contraction phase  of the  business cycle . That's when voters are clamoring for relief from a  recession . How does it work? The government either spends more,  cuts taxes , or does both if i...