Bpp learning Media is an acca approved Content Provider

 
79 
(a) 
High inflation increases 
economic uncertainty
. Bringing inflation under control will restore 
business confidence and help international trade by stabilising the exchange rate. 
(b) 
A resurgence of business confidence through lower interest rates (due to less uncertainty and 
lower inflation) will 
stimulate investment 
and real output. 
(c) A 
controlled growth in the money supply
will provide higher incomes for individuals to purchase 
the higher output. 
 
11
The balance of payments 
The 
balance of payments accounts 
consist of a current account with visibles and invisibles sections and 
transactions in capital (external assets and liabilities including official financing).
11.1 The nature of the balance of payments
Under the current method of presentation of the UK balance of payments statistics, 
current account
transactions are subdivided into four parts.

Trade in goods 

Income 

Trade in services 

Transfers 
Before 1996, the term 
visibles
was used in official statistics for trade in goods and the term 
invisibles
was used for the rest. These terms have now been dropped in order to give more emphasis to the 
balances for trade in goods and services, although you may still find them mentioned. 
Income is divided into two parts. 
(a) 
Income from employment of UK residents by overseas firms 
(b) 
Income from capital investment overseas 
Transfers are also divided into two parts. 
(a) 
Public sector payments to and receipts from overseas bodies, such as the EU. Typically these are 
interest payments 
(b) 
Non-government sector payments to and receipts from bodies, such as the EU 
The