3. a. What do we mean when we say the the SOP in Total is in Deficit or The BOP in Total tions were created by the Bretton Woods System 1945-1972
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Balane of payment (BOP) records all the transactions of the home country with the rest of the world. In BOP mainly two accounts are maintained namely current account and capital account.
Under current account the transactions related to import and exports of goods and services, receipts and payments of interest, royalty etc and unilaternal recepits and payments.
Under capital account the transactions which affect the asset and liability of the country are recorded like borrowing and lending, foreign portfolio investment and foreign direct investment.
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