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प्रश्न
Should a current account deficit be a cause for alarm? Explain.
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उत्तर
Current account deficit is the excess of total imports of goods, services and transfers over total exports of goods, services and transfers. This situation makes a country debtor to the rest of the world. But, this cannot be always treated as a cause for alarm because countries might be running in deficits (current account) to increase productivity and exports in future. Also, more investment will help in building capital stock, which in future will lead to rise in output.
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संबंधित प्रश्न
Explain the automatic mechanism by which BoP equilibrium was achieved under the gold standard.
Identify which of the following is not an example of ‘invisible item’ under Current Account of the Balance of Payments transactions:
Under the Balance of Payments structure of a nation, the two main categories of accounts for the classification of the transactions are ____________ and ____________.
i. current account
ii. unilateral transfer account
iii. capital account
iv. loan account
Identify the correct alternatives from the following:
Identify the correct matched pair from Column A to Column B and choose the correct alternative:
| Column A | Column B |
| 1. Export of weapons to Vietnam | (a) Credit side of Current Account |
| 2. Import of Apache Helicopter from USA | (b) Capital Account of Balance of Payments |
| 3. Remittances from relative from UAE | (c) Debit side of Current Account of Balance of Payments |
| 4. Investment by Tesla Incorporation in India | (d) Credit side of Current Account of Balance of Payments |
Payment for import of goods is recorded in the ______ side of the Current account of the Balance of Payments.
Read the following statements carefully and choose the correct alternatives given below:
Statement 1: Current account records exports and imports of visible and invisible items only.
Statement 2: The balance of the current account is the difference between the sum of credit items and the sum of debit items on the current account.
Read the following statements carefully:
Statement 1: Export of financial services by India will be recorded on credit side of current account.
Statement 2: Foreign Direct Investments in India will be recorded on credit side of capital account.
In the light of the given statements, choose the correct alternative:
Giving valid reason, state whether the following statement is true or false:
Dividend received from investment abroad is recorded on the credit side of the capital account.
What does the current account of a country's Balance of Payments record?
Wages, profits, interest, and rent earned from or paid abroad are recorded in the current account under:
Which of the following correctly describes unilateral transfers in the current account?
The IMF's BPM6 classification divides the Balance of Payments (BOP) into which three accounts?
When receipts on the current account exactly equal payments, the current account is said to be:
A current account deficit means that:
The balance on the current account has which two components?
The Balance of Trade (BOT) is defined as:
A BOT (Balance of Trade) surplus occurs when:
In current account accounting, an export of goods or services is recorded as a:
