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

What caused the end of malthusian age, So what caused the end of Malthusian...

So what caused the end of Malthusian age? How did humanity escape from the trap in that invention and ingenuity increased the numbers though not the material well-being of humanity

#title.market structures, contrast the longrun equilibrium positions of mon...

contrast the longrun equilibrium positions of monopolistic competition firm and oligopoly

Draw a supply or demand diagram of the treasury bond market, 1) A) Suppose ...

1) A) Suppose that several months of data showed the CPI increasing at a 4.5% annual rate due largely to increases in the price of energy and food related commodities following sev

Describe the trade triangles, Steel and aluminum production Steel Canada 50...

Steel and aluminum production Steel Canada 500, France 1200 Aluminum Canada 1500, France 800 The maximum amount of steel or aluminum that Canada and France can produce if they full

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

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

Calculate the responsiveness of consumers, The price elasticity of demand i...

The price elasticity of demand is how economists calculate the responsiveness of consumers to alters in prices for a commodity.  In other words, as price enhances (reduces), the qu

Average cost curve, Why short run average cost curve is ‘U’ shaped

Why short run average cost curve is ‘U’ shaped

Marginal Cost, Can marginal cost be constant? If so, does this mean that ma...

Can marginal cost be constant? If so, does this mean that marginal cost are equal to average variable cost?

Indifference curve, Jane receives utility from days spent travelling on vac...

Jane receives utility from days spent travelling on vacation domestically(D) and days

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