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

Summary of demand and supply considerations of education, Summary of Demand...

Summary of Demand and Supply Considerations of Education A study of supply and demand considerations in education helps in understanding four major issues and concerns of an e

Private, Question: (a) Using an example, differentiate between private...

Question: (a) Using an example, differentiate between private, social and external costs and benefits. (b) With the use of a diagram, describe the difference between profi

Market structures, illustrate and discuss the implications of various marke...

illustrate and discuss the implications of various market structures (competitive and non competitive) for price determination

Adulteration, How can we test adulterants in vegetable oils?

How can we test adulterants in vegetable oils?

How do we obtain total cost curve, Total cost curve (TC) is obtained by add...

Total cost curve (TC) is obtained by adding up vertically total fixed cost and total variable cost curves because the total cost is sum of total fixed cost and total variable cost

Determinants of demand for education, Normal 0 false false ...

Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

Economics, Tc and TVC curves have an inverted s-shape

Tc and TVC curves have an inverted s-shape

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