Advertisements
Advertisements
प्रश्न
Briefly explain two reasons for the adverse Balance of Payments in any economy.
उत्तर
Two reasons for the adverse Balance of Payments in any economy are:
- Cyclic fluctuations: Cyclic fluctuation in business activity leads to BOP disequilibrium. When there is a depression in a country, volume of both export and imports falls. But the fall in exports may be greater than the fall in imports, due to the decline in domestic production. Therefore there is an adverse BOP situation or disequilibrium.
- Price changes: If there is inflation in the country, prices of the exports increase. As a result, the export falls. At the same time, the demand for imports increases. This results in an adverse balance of payment.
APPEARS IN
संबंधित प्रश्न
Explain the distinction between autonomous and accommodating transactions in balance of payments. Also explain the concept of balance of payments 'deficit' in this context
Foreign exchange transactions which are independent of other transactions in the Balance of Payments Account are called ______.
Give the meaning of balance of payments.
Distinguish between current account and capital account
Will the following be included in the domestic product of India? Give reasons for your answer.
Profit earned by foreign companies in India
Will the following be included in the domestic product of India? Give reasons for your answer.
Profit earned by a branch of State Bank of India in Japan
Will the following be included in the national income of India? Give reasons for your answer
Salaries of Indians working in the American Embassy in India
Name the broad categories of transactions recorded in the 'current account' of the Balance of Payments Accounts
Where will the sale of machinery to abroad be recorded in the Balance of Payments Accounts? Give reasons.
Where is 'borrowings from abroad' recorded in the Balance of Payments Accounts? Give reasons.
What is 'current account deficit' in the balance of payments?
Distinguish between 'autonomous' and accommodating' Balance of Payments transactions.
Explain the concept of 'deficit' in balance of payments.
Distinguish between Autonomous and Accommodating transactions of Balance of Payments account.
Where will sale of machinery to abroad be recorded in the balance of payment accounts?
Identify the correctly matched pair of items in Column A to those in Column B:
| Column A | Column B | ||
| 1 | Total of factor payments | (a) | Value Added Method |
| 2 | Value Added | (b) | Stock Variable |
| 3 | Festival gifts | (c) | Transfer payments |
| 4 | Final expenditure incurred by the government | (d) | Consumption expenditure |
Categorise the following item into Current Account or Capital Account of Balance of Payment of India.
Use of transport by Indian tourists in Dubai
Categorise the following item into Current Account or Capital Account of Balance of Payment of India.
Loan taken by India from International Monetary Fund (IMF) to cover its BOP deficit
List different components of Balance of Payment on current account and capital account.
