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Accommodating transactions in the Balance of Payments are undertaken with which motive?

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Question

Accommodating transactions in the Balance of Payments are undertaken with which motive?

Options

  • To record unilateral transfers

  • To finance the BoP gap

  • Independent / Profit or Need-based

  • To earn profit on exports of services

MCQ
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Solution

Accommodating transactions are not independent transactions; their specific motive is to finance the BoP gap, i.e., the surplus or deficit that arises from autonomous transactions.

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