Advertisements
Advertisements
प्रश्न
Suppose, Country X, has more inflation than Country Y. Which of the following is most likely situation to happen in such a case, assuming other factors being constant?
पर्याय
A surplus trade balance in Country X
A deficit trade balance for Country X
A rise in exports from Country X to Country Y
A deficit trade balance for Country Y
उत्तर
A deficit trade balance for Country X.
Explanation:
In country X, inflation indicates increasing manufacturing costs, which leads to higher pricing. As a result, exports become more expensive while imports become less expensive. It will result in a decrease in exports and an increase in imports. If a country's exports are less than its imports, the country will have a trade deficit.
APPEARS IN
संबंधित प्रश्न
What are official reserve transactions? Explain their importance in the balance of payments.
Why is the open economy autonomous expenditure multiplier smaller than the closed economy one?
Calculate the open economy multiplier with proportional taxes, T = tY, instead of lump−sum taxes as assumed in the text.
In the above example, if exports change to X = 100, find the change in equilibrium income and the net export balance.
Suppose C = 100 + 0.75Y D, I = 500, G = 750, taxes are 20 per cent of income, X = 150, M = 100 + 0.2Y. Calculate equilibrium income, the budget deficit or surplus and the trade deficit or surplus.
Answer the following question.
Define "Trade surplus". How is it different from "Current account surplus"?
Other things remaining the same, when in a country the market price of foreign currency falls, national income is likely ______.
BoP is measured as ______.
Which of the following items relate to BoP?
The balance of trade shows a deficit of ₹5,000 crores and the value of imports are ₹9,000 crores. What is the value of exports?
The balance of trade shows a deficit of ₹300 crore. The value of exports is ₹500 crore. What is the value of imports?
Considering operating surplus which one of the following is not a part of it?
‘Current account deficit in an economy must be financed by a corresponding capital account surplus’.
Do you agree with the given statement? Give valid reason(s) in support of your answer.
'Deficit' in Balance of payment (BOP) refers to the excess of ______.
