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

How have economists traditionally defined economic growth, How have economi...

How have economists traditionally defined "economic growth," and how is that different from "living standards growth"?  Economists have traditionally explained economic growth

Expanding healthcare infrastructure, what is the demand when expanding heal...

what is the demand when expanding healthcare infrastructure?

Law for diminishing marginal returns, The Law for Diminishing Marginal Retu...

The Law for Diminishing Marginal Returns - As use of an input increases in equal increments, a point will be approched at which the resulting additions to output decreases

Industry''s long-run supply curve, The Industry's Long-Run Supply Curve ...

The Industry's Long-Run Supply Curve * Long-Run Elasticity of Supply   1) Constant-cost industry Long run supply is horizontal Small increase in price will induc

Competitiveness in your industry, a) Collect costs, revenue data, or other ...

a) Collect costs, revenue data, or other data from the industry that you deem relevant. Describe how you would modify the data in order to make it relevant to decisions a manager m

Define regressive tax, Q. Define Regressive Tax? Regressive Tax: A tax ...

Q. Define Regressive Tax? Regressive Tax: A tax in that lower-income individuals or households bear a proportionately greater burden of the tax. Sales taxes aretypically consid

Find the equilibrium precaution, Mr. Smith can cause an accident, which ent...

Mr. Smith can cause an accident, which entails a monetary loss of $1000 to Ms. Adams. The likelihood of the accident depends on the precaution decisions by both individuals. Spe

Consumer and producer surplus, Evaluating  the Gains and Losses from the P...

Evaluating  the Gains and Losses from the Policies of Government:  Consumer and Producer Surplus * Review - Consumer surplus is total benefit or value which consumers rece

Explain how normal profit and abnormal profit differ, Explain how normal pr...

Explain how normal profit and abnormal profit differ. Normal profit (breakeven) - which must contain commentary on the inclusion of opportunity costs. Abnormal profit should be

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