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
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 ______.
BoP is measured as ______.
Which of the following items relate to BoP?
Autonomous items are related to those transactions which ______.
Accommodating items are those items of Bop which ______.
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?
Considering operating surplus which one of the following is not a part of it?
‘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.
'Deficit' in Balance of payment (BOP) refers to the excess of ______.
Distinguish between Autonomous transactions and Accommodating transactions.
