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

Given Qd=3-P^2, Yao''s weekly demand for basketballs is given by Qd = 3-P^2...

Yao''s weekly demand for basketballs is given by Qd = 3-P^2 where P is the price of basketballs. At the current price, Yao''s demand for basketballs is unit elastic. What is the cu

Rent, determination of rent

determination of rent

Explain production and costs, The reason that an entrepreneur supposes the ...

The reason that an entrepreneur supposes the risk of starting a business is to earn profits.  The fundamental assumption in the theory of production is that a rational owner of a b

Describe what is meant by cross elasticity of demand, Question: (a) Wit...

Question: (a) With the help of diagrams, explain how the price and quantity demanded or supplied of fuel will change under the different scenarios: (i) Consumers expect a fu

Unions, Unions are Organizations of working people which aim to bargain col...

Unions are Organizations of working people which aim to bargain collectively with employers in order to improve workers' bargaining power, regulate working conditions and raise wag

Comparative advantage, Comparative Advantage:A theory of international trad...

Comparative Advantage:A theory of international trade which originated with David Ricardo in early 19th Century and is maintained (in revised form) within neoclassical economics. T

Equilibruim, I want to know all about equilibruim consumer equilibruim firm...

I want to know all about equilibruim consumer equilibruim firms equilibruim nd market equilibruim technically also??

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