Describe the three major broad categories of items that define the parts of a country's balance of payments.

What will be an ideal response?

POSSIBLE RESPONSE: There are three broad categories of items that define the three parts of a country's balance of payments: the current account, the financial account, and the official international reserves account. The current account includes all debit and credit items that are exports and imports of goods and services, income receipts and income payments, and gifts. The balance on goods and services measures the country's net exports. It is often called the trade balance. The private finance account balance consists of the net value of flows of financial assets and similar claims, excluding official international reserve asset flows. The values reported in the financial account are for the principal amounts only of assets trade. Any flows of earnings on foreign assets are reported in the current account. Changes in official holdings of international reserves are reflected in the official international reserves account. Official international reserve assets are money-like assets that are held by governments and that are recognized by governments as fully acceptable for payments between them.