The BOP must balance. If it does not, something has not been counted or has been counted improperly. It is therefore incorrect to state that BOP is in disequilibrium. It cannot be. The supply and demand for a country’s may be imbalanced, but supply and demand are not the same thing as the BOP. A sub account of the BOP, such as the merchandise trade balance, may be imbalanced, but the entire BOP of a single country is always balanced.
There are three main elements of the actual process of measuring international economic activity:
1) identifying what is and is not an international economic transaction;
2) understanding how the flow of goods, services, assets, and money create debits and credits to the overall BOP; and
3) understanding the bookkeeping procedures for BOP accounting.