Capital account, Microeconomics

Assignment Help:

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.


Related Discussions:- Capital account

Elasticity, elasticity concept in policy formulation

elasticity concept in policy formulation

The demand for big macs, illustrate and explain the changing demand gor big...

illustrate and explain the changing demand gor big Mac using the indifference curves and budget line

The demand curve of monopoly, when does price and output determined in the ...

when does price and output determined in the unregulated monopoly

Monopoly, b) Why is monopoly considered to be generally against public inte...

b) Why is monopoly considered to be generally against public interests, and what policy instruments can be used to regulate monopolies?

Recent development in demand analysis, RECENT DEVELOPMENT IN DEMAND ANALYSI...

RECENT DEVELOPMENT IN DEMAND ANALYSIS: For many years economic theorists analysed the optimal behaviour of consumers while econometricians estimated consumer demand and expend

Elasticity, Calculate the price elasticity of demand or supply for the foll...

Calculate the price elasticity of demand or supply for the following function when P=8 p=6(I)p=40-0.5q

Micro, The prevention of major swings in economic activity can be handled m...

The prevention of major swings in economic activity can be handled most easily by the

Disposable income, what is disposable income and its importance.

what is disposable income and its importance.

Statistics, define statistics in plural and singular sense

define statistics in plural and singular sense

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd