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

Theory, critical of comparative advantage theory

critical of comparative advantage theory

Risk and cost benefit analysis , COST benefit analysis Costs that ...

COST benefit analysis Costs that are applicable in the project and the benefits that are associated with it are as follows: Risk occurs at different levels. It takes pl

Revenue, what is the meaning of total revenue?

what is the meaning of total revenue?

Consumer behaviour, discuss how economic theory of marginal utility explain...

discuss how economic theory of marginal utility explains the optimum pattern of consumption for an individual consumer

What is the price elasticity of demand for electricity, 1. On Wednesday the...

1. On Wednesday the 16 th , 2008 an enormous avalanche knocked out the lines that transmitted electricity from a hydroelectric dam to Juneau, Alaska. This eliminated Juneau's prima

Explain advantage and comparative advantage differ, 1. Explain how abs...

1. Explain how absolute advantage and comparative advantage differ? 2. Give an example in which a person has an absolute advantage in doing some thing but another pers

#titlwhat is the second best?, what is the second best?prove the theorem wi...

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

Define disposable incomeand dumping, Define Disposable Incomeand dumping ...

Define Disposable Incomeand dumping Disposable Income :  The amount of income left after as deductions as income tax, pension contributions and national insurance. More genera

Problems relating to national income estimation, Problems relating to natio...

Problems relating to national income estimation: Changing prices of goods and services . Prices of goods and services do change from one period to another. This makes compari

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