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

Supply of labour, use a graphical illustration to briefly describe what the...

use a graphical illustration to briefly describe what the influence of an increase in immigrants would be on the market supply of labour

Secondhand smoke globally kills more than 600, Secondhand smoke globally ki...

Secondhand smoke globally kills more than 600,000 people each year, accounting for 1 percent of all deaths worldwide, according to a new study. . . . Researchers estimated th

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

meaning and characteristics of plural sense and singlural

Marginal Cost, why raise MC cost after minimum level ?

why raise MC cost after minimum level ?

Define Amagat law of partial volume, Define Amagat law of partial volume, ...

Define Amagat law of partial volume, Amagat law of partial volume The total volume of a mixture of non reacting gases at constant temperature & pressure is equal to sum of indiv

Write down the classical linear regression model, Question: (a) Write ...

Question: (a) Write down the Classical Linear Regression Model (CLRM) and explain its assumptions in detail. (b) The following data relating to information collected on

Calculate real gdp using the chained-dollar method, Why in 1996 did the BEA...

Why in 1996 did the BEA switch to calculate real GDP using the "chained-dollar method" from the "constant-dollar method"? The BEA made the switch from the constant-dollar metho

Explain key assumptions and desired properties, Explain the key assumptions...

Explain the key assumptions and desired properties commonly used economics. Economists generally make all or some of the given key assumptions and a condition while they study

Labour supply, Discuss how the opportunity cost principle influence a suppl...

Discuss how the opportunity cost principle influence a supplier''s decision to supply labour

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