principal trading partners. 8.0 Analyze the effect of various events on the balance of payments and the exchange rate 8.1 Name the divisions that make up our balance of payments and the main components of these divisions. 8.2 Distinguish between a favourable and unfavourable balance of payments. 8.3 Understand how a flexible exchange rate functions. 8.4 Given an event, state the following: 8.4.1 Division affected. 8.4.2 Componenet affected. 8.4.3 Effect on payments and/or receipts 8.4.4 Effect on the balance of payments. OW 8.4.5 Effect on the exchange rate assuming flexible exchange rates