Balance of trade
Which transactions find out the balance of trade? When the balance of trade is in surplus?
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Exports of goods and imports of goods find out BOT. Whenever the value of exports of goods is bigger than the value of imports of goods.
Deficit in balance of trade point: Deficit in balance of trade points out that the imports of good are bigger than exports.
Determine the factors accountable for inflow of foreign currency? Answer: a) Foreigners buying home country services and goods via exports. b) Foreigners investment in home country via joint ventures and via
Describe the meaning of deficit in BOP: Whenever autonomous foreign exchange payments surpass autonomous foreign exchange receipts, the difference is termed as balance of payments deficit.
Balance of payments (BOP) always balances. Describe it. Answer: Balance of payments is for all time balanced. The negative balance on current account is equated wit
Foreign exchange rate: The Foreign exchange rate is a price of foreign currency in terms of domestic currency.
distinguish between autonomous transactions and accommodating transactions under balance of payments
Flexible (or floating) exchange rate system: This is a system in which exchange rate is found out by forces of demand and supply of the foreign currencies concerned in the foreign exchange market. There is no official interference in the foreign excha
State the two sources of demand of foreign exchange: Import of services and goods and to acquire education in abroad.
If a Hawaiian can produce 50 bushels of either potatoes or pineapples per acre, whereas an Idahoan manages just 3 bushels of pineapples or 30 bushels of potatoes per acre, then: (1) Idaho’s absolute drawbacks prevent gains from specialization and exchange. (2) T
Supply of foreign exchange: (A) By exports of services and goods(B) Direct foreign investment in residence country(C) For approximate purchases by non-residents in the home country(D) Remittances
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