TERMS OF TRADE
In economics, terms of trade (TOT) refer to the relationship between how much money a country pays for its imports and how much it brings in from exports. When the price of a country's exports increases over the price of its imports, economists say that the terms of trade has moved in a positive direction.
TERMS OF PAYMENT
Payment conditions between buyer and seller. Terms are cash, open account, secured account. The conditions under which a seller will complete a sale. Typically, these terms specify the period allowed to a buyer to pay off the amount due, and may demand cash in advance, cash on delivery, a deferred payment period of 30 days or more, or other similar
provisions.
In economics, cash is money in the physical form of currency, such as banknotes and coins.
Open account. An open account transaction is a sale where the goods are shipped and delivered before payment is due. Obviously, this option is the most advantageous for the importer in terms of cash flow and cost, but it is consequently the highest risk option for an exporter.
BALANCE OF PAYMENT
The balance of payments, also known as balance of international payments and abbreviated B.O.P. or BoP, of a country is the record of all economic transactions between the residents of the country and the rest of the world in a particular period
A country's balance of payments tells you whether it saves enough to pay for its imports. It also reveals whether the country produces enough economic output to pay for its growth. The BOP is reported for a quarter or a year.
A balance of payments deficit means the country imports more goods, services and capital than it exports. It must borrow from other countries to pay for its imports. In the short-term, that fuels the country's economic growth . It's like taking out a school loan to pay for education. Your expected higher future salary is worth the investment. In the long-term, the country becomes a net consumer, not a producer, of the world's economic output. It will have to go into debt to pay for consumption instead of investing in future growth. If the deficit continues long enough, the country may have to sell off its assets to pay its creditors. These assets include natural resources, land, and commodities .
A balance of payments surplus means the country exports more than it imports. Its government and residents are savers. They provide enough capital to pay for all domestic production. They might even lend outside the country. A surplus boosts economic growth in the short term. It has enough excess savings to lend to countries that buy its products. The increased exports boosts production in its factories, allowing them to hire more people.
BILL OF EXCHANGE
A written order to a person requiring them to make a specified payment to the signatory or to a named payee
SHIPPING NOTE
A document used in shipping goods by sea. In the case of free goods the shipping notes are the receiving note, addressed by the shipper to the chief officer of the vessel, requesting him to receive on board specified goods, and a receipt for the mate to sign, on receiving whose signature it is called the mate's receipt , and is surrendered by the shipper for the bills of lading.
mate's receipt . Document signed by an officer of a vessel evidencing receipt of a shipment onboard the vessel.
BALANCE OF TRADE
The balance of trade is the value of a country's exports minus its imports . It's the most significant component of the current account . That also makes it the biggest component of the balance of payments that measures all international transactions . The trade balance is the easiest component to measure. All goods and many services must pass through the customs office.
The current account measures a country's net income earned on international assets . The current account also includes trade balance plus any other payments across borders. How to Calculate It
A country's trade balance equals the value of its exports minus its imports.
The formula is X - M = TB, where:
X = Exports
M = Imports
TB = Trade Balance
BILL OF LADING
A bill of lading is a legal document between a shipper and a carrier that details the type, quantity and destination of the goods being carried. The bill of lading also serves as a shipment receipt when the carrier delivers the goods at the predetermined destination.
No comments:
Post a Comment