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

Second best, what is the theory of second best ? prove the theorem with the...

what is the theory of second best ? prove the theorem with the help of a diagram ?

International monetary fund, INTERNATIONAL MONETARY FUND: The importan...

INTERNATIONAL MONETARY FUND: The important objectives before the Fund presently are as follows: • To promote international cooperation; • To facilitate the expansion and ba

Meaning and characteristics of plural sense and singlural , meaning and cha...

meaning and characteristics of plural sense and singlural

Define Gibb''s Energy, Gibb''s energy In every chemical system, the substa...

Gibb''s energy In every chemical system, the substance moves in a direction in which there is a decrease in free energy, for example i.e. ?G is negative. G = H - TS where, G is

income and cross elasticities of demand, What are the income and cross ela...

What are the income and cross elasticities of demand?  Why might they be useful?  Explain.

Describe positive and a negative externality, 1). Define and explain the co...

1). Define and explain the concept of an externality. Provide examples of both positive and a negative externality. 2). The Prisoner's Dilemma Exercise:

Scitovsky contour, I don''t really understand how scitovsky contour is form...

I don''t really understand how scitovsky contour is formed.

Demand, what are tne methots of demand forecasting ?

what are tne methots of demand forecasting ?

Advertising budget, analyse the method by which a firm can allocate the giv...

analyse the method by which a firm can allocate the given advertising budget between different media advertisement?

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