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प्रश्न
‘Current account deficit in an economy must be financed by a corresponding capital account surplus’.
Do you agree with the given statement? Give valid reason(s) in support of your answer.
पर्याय
Agree
Disagree
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उत्तर
I agree with the given statement.
Explanation:
Since, in accounting sense; Current Account + Capital Account ≡ 0
If an economy is facing the situation of current account deficit (CAD), the same must be financed through surplus in capital account.
CAD may be setoff through net capital inflows. Transactions like selling off assets or borrowing from abroad, may be instrumental in balancing CAD in Balance of Payments account.
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संबंधित प्रश्न
Why is the open economy autonomous expenditure multiplier smaller than the closed economy one?
Calculate the open economy multiplier with proportional taxes, T = tY, instead of lump−sum taxes as assumed in the text.
Suppose C = 100 + 0.75Y D, I = 500, G = 750, taxes are 20 per cent of income, X = 150, M = 100 + 0.2Y. Calculate equilibrium income, the budget deficit or surplus and the trade deficit or surplus.
Answer the following question.
Define "Trade surplus". How is it different from "Current account surplus"?
BoP is measured as ______.
Which of the following items relate to BoP?
Accommodating items are those items of Bop which ______.
Disequilibrium in balance of payments means ______.
Which of the following had been responsible for the heavy burden of the deal and its interest?
The balance of trade shows a deficit of ₹5,000 crores and the value of imports are ₹9,000 crores. What is the value of exports?
The balance of trade shows a deficit of ₹300 crore. The value of exports is ₹500 crore. What is the value of imports?
______ refers to the situation of excess imports of goods over exports of goods.
Assertion (A): The Balance of payments is in surplus, if autonomous receipts are greater than autonomous payments.
Reason (R): Autonomous transactions are determined by the difference in the Balance of Payments.
Distinguish between Autonomous transactions and Accommodating transactions.
