Definition
- Balance of payments equilibrium
- Balance of payments equilibrium means that, over time, what a country earns from abroad on its current account roughly matches what it spends abroad.
Example
Can you think of an example of balance of payments equilibrium?
A country with a current account deficit of £30 billion a year must borrow abroad or sell assets to pay for it.
Test yourself
Can you name the four main macroeconomic objectives?