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Capital Account:
The Capital Account presents transfers of money and other capital items and changes in the country's foreign assets and liabilities resulting from the transactions recorded in the current account. The deficit on the current account and on account of capital transactions can be financed by external assistance (loans and grants) drawing from the International Monetary Fund and allocation of the Special Drawing Rights. The BOP accounts provide a link between the increase in gross external debt and the portfolio and spending decisions of the economy. Thus, increase in gross external debt = current account deficit (CAD)
- direct and long-term portfolio capital inflows
+ official reserve increases
+ other private capital outflows
The above equation shows that an increase in external debt can have three broad sources: current account deficits not financed by long-term capital inflows, borrowing to finance a reserve build-up or private outflows of capital.
Suppose that investment spending increases by $10 million, shifting up the aggregate expenditure line and increasing GDP from GDP1 to GDP2. If the MPC is 0.9, then what is the chan
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explain and illustrate the changing demand for big mac using indefference curve and budget line
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Define Nash equilibrium and explain with the help of the game ''prisoner''s dilemma''.
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