Question

Distinguish between an autonomous transaction and accommodating transactions of the balance of payments account.

Distinguish between autonomous and accommodating capital flows in the balance of payments.

Distinguish between Autonomous items and Accommodating items.

Answer 1

	Autonomous transactions	Accommodating transactions
1.	Autonomous transactions are independent of the state of the balance of payments account (BOP A/c).	Accommodating transactions are undertaken to maintain the balance in the BOP account.
2.	These transactions take place on both current and capital accounts.	These transactions take place only on the capital account.
3.	These items in BOP refer to foreign exchange transactions that are made independently of the state of the balance of payment, such as profit motive.	These items in BOP refer to the transaction that is undertaken to cover a deficit or surplus in autonomous transactions.