Question

Distinguish between Autonomous and Accommodating transactions of Balance of Payments account.

Answer 1

The difference between Autonomous and Accommodating transactions of Balance of Payments account is given as follows:

Basis	Autonomous Transactions	Accommodating Transactions
Definition	Autonomous items refer to those international economic transactions that are undertaken with the sole motive of earning profit.	Accommodating items refer to those international economic transactions that are not undertaken with the motive of earning profit such as government financing, injection, or withdrawal from the official reserves.
Another name	Autonomous transactions are also called 'above the line items' in BOP.	Accommodating items are also called 'below the line items' in BOP.