Explain the concept of 'deficit' in balance of payments.

1.	Explain the concept of 'deficit' in balance of payments.
Answer» A deficit in Balance of Payment occurs when during the year autonomous inflows of foreign exchange fall short of autonomous outflows of foreign exchange. Autonomous transactions are the transactions which are independent of other transactions in the Balance of Payments. Detailed Answer : The transactions recorded in BOP account are classified as autonomous transactions and accommodating transactions. Autonomous Transactions refer to the international economic transactions taken with the motive of profit. Deficit in the BOP occurs when autonomous foreign exchange receipts fall short of autonomous foreign exchange payments. Autonomous transactions, the transaction not influenced by other transactions in the BOP.

Answer»

A deficit in Balance of Payment occurs when during the year autonomous inflows of foreign exchange fall short of autonomous outflows of foreign exchange. Autonomous transactions are the transactions which are independent of other transactions in the Balance of Payments.

Detailed Answer :

The transactions recorded in BOP account are classified as autonomous transactions and accommodating transactions. Autonomous Transactions refer to the international economic transactions taken with the motive of profit. Deficit in the BOP occurs when autonomous foreign exchange receipts fall short of autonomous foreign exchange payments. Autonomous transactions, the transaction not influenced by other transactions in the BOP.

Discussion

No Comment Found

Related InterviewSolutions

What is meant by coagulation of a colloidal solution? Describe briefly any three methods by which coagulation of lyophobic sols can be carried out.
What is meant by coagulation of a colloidal solution? Name any method by which coagulation of lyophobic sols can be carried out.
Classify the following contraceptives measures into different methods of birth control.(1) Vasectomy(2) tubectomy(3) Saheli(4) Diaphragms(5) Cervical caps(6) Condoms
An object is placed at a distance of 30 cm from a concave lens of focal length 15 cm. List four characteristics (nature, position etc) of the image formed by the lens.
Explain the following: (i) CH3COOH is a weak acid. (ii) Propene undergoes addition reaction. (iii) The gas stoves have inlets for air.
Accumulation of harmful chemicals in our body can be avoided. Explain how this can be achieved ?
State the changes that take place in the uterus when: (i) Implantation of embryo has occurred (ii) Female gamete/egg is not fertilised
A hollow metal sphere of radius 5cm is charged such that the potential on its surface is 10V. What is the potential at the centre of the sphere?
Ms. Raveena Sen is an IT expert and a freelancer. She recently used her skills to access the Admin password for the network server of Super Dooper Technology Ltd. and provided confidential data of the organization to its CEO, informing him about the vulnerability of their network security. Out of the following options (i) to (iv), which one most appropriately defines Ms. Sen? Justify the reason for your chosen option: (i) Hacker (ii) Cracker (iii) Operator (iv) Network Admin
An elevator descends into a mine shaft at the rate of 6 m/min. If the descent starts from 10 above the ground level, how long will it take to reach -350 m?