Foreign exchange transactions dependent on other foreign exchange transaction are called:(choose the correct alternative)
(a) Current account transactions
(b) Capital account transactions
(c) Autonomous transactions
(d) Accommodating transaction
The correct option is (d). Foreign exchange transactions dependent on other foreign exchange transactions are called accommodating transactions. These transactions are international economic transactions which are not made with a profit motive such as government financing. This transaction is meant to restore the balance of payment identity.
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