Advertisements
Advertisements
Question
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.
Options
Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).
Assertion (A) is true, but Reason (R) is false.
Assertion (A) is false, but Reason (R) is true.
Advertisements
Solution
Assertion (A) is true, but Reason (R) is false.
Explanation:
Surplus in BOP occurs when Autonomous Receipts (both current and capital) exceed Autonomous Payments (both current and capital). The difference in BOP determines which transactions can be accommodated. These are done on purpose by the RBI after determining whether the BOP is in deficit or surplus.
APPEARS IN
RELATED QUESTIONS
What are official reserve transactions? Explain their importance in the balance of payments.
Calculate the open economy multiplier with proportional taxes, T = tY, instead of lump−sum taxes as assumed in the text.
In the above example, if exports change to X = 100, find the change in equilibrium income and the net export balance.
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"?
Other things remaining the same, when in a country the market price of foreign currency falls, national income is likely ______.
Which of the following items relate to BoP?
Autonomous items are related to those transactions 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?
______ refers to the situation of excess imports of goods over exports of goods.
Considering operating surplus which one of the following is not a part of it?
'Deficit' in Balance of payment (BOP) refers to the excess of ______.
Distinguish between Autonomous transactions and Accommodating transactions.
