write short notes on autonomous transactions and accommodating transac
distinguish between autonomous transactions and accommodating transactions under balance of payments
Fixed exchange rate system (or pegged exchange rate system): This is a system in which exchange rate of a currency is fixed by government. This system makes sure stability in the foreign trade and capital movement.
safeguard against the crisis of confidence in system explain
Balance of payment: It is a systematic record of each and every economic transaction of a country with the rest of world in an accounting year.
Components of capital account of balance of payment: A) Borrowing and lending to and from abroad.B) Change in foreign exchange reserves C) Investment to and from abroad.
Balance of payment Accounts: It is the systematic record of all economic transactions among the residents of a country and rest of the world in a specified period (1-year) of time.
Which transactions- autonomous or accommodating carry balance in BOP? Answer: Accommodating transactions carry balance in the BOP or balance of payment.
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.
Define foreign exchange: It is the currency other than domestic currency.
The U.S. economy is an instance of a system characterized by: (1) Mixture of different aspects of various economic systems. (2) Strictly decentralized the decision making process. (3) Centralized ownership of resources. (4) Political decisions regarding all allocative
Components of current account of BOP account: (A) Import-Export of goods(B) Import-Export of services(C) Unilateral transfers
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