Question

Which of the following statements is not true?

Options

• Borrowings from the Asian Development Bank by the government is an accommodating transaction.

• Loans given to Sri Lanka by the government is an accommodating transaction

• Buying of machinery from Japan is an accommodating transaction.

• Borrowing from public is an accommodating transaction.

Answer 1

Buying of machinery from Japan is an accommodating transaction.

Explanation:

Purchasing machinery in Japan is a self-contained transaction. Autonomous items are transactions in the Balance of Payments (BOP) that are carried out for profit.