Positive Balance of Payments
I have a problem with the satement “Things will look excellent for the US if we could just get to where we are consistently executing a positive Balance of Payments.” Can someone in short comment on this statement?
Expert
Balance of payments is a measure of net flow of funds from a country; it consists of both long term and short term flow of funds. A positive BOP reflects that the country is gaining from long term and short term transactions in the world and hence, accumulating wealth. Therefore, if the US has a positive BOP then it means that it is accumulating wealth thereby benefitting the economy in the short run as well as long run.
Which transactions- autonomous or accommodating carry balance in BOP? Answer: Accommodating transactions carry balance in the BOP or balance of payment.
Analyse free trade and discuss the role of international organisattions in regulating trade between countries. How the control of trade has impacted positively or negatively on a company of your choice
‘Can foreign exchange markets be analyzed in similar manner as the markets for ordinary physical commodities? Do demand slope downwards and supply slope upwards for currencies?’
If the Chinese economy could create all goods with fewer resources per unit than are needed in US, the citizens of China would: (i) Encompass a comparative advantage in the whole thing. (ii) Be self-sufficient since there would be no potential profits from trade. (iii
In simple circular flow model, the only entities which finally consume goods, own resources, pay taxes or bear the loads of inflation, experience joy, or suffer pain, are as: (i) corporations. (ii) Households. (iii) Government agencies. (iv) Business
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.
In a completely employed economy, the higher the yield of capital goods, and the bigger its: (1) Present living standards. (2) Present output of consumer goods. (3) Growth of capacity for the future production. (4) Rates of inflation and unemployment.
Induced investment: It is a type of investment that is of profit motive in nature.
Demand for foreign exchange is prepared to: (A) Purchase services and goods (B) Send gifts and funding(C) Speculate the value of foreign currencies, (D) Invest and procure financial assets
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