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

Common property regime , Normal 0 false false false EN-...

Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

Create a multi-dimensional arrays, Create a Document that displays informat...

Create a Document that displays information about cars. First, create a select with an id="make". It will not have any makes in the options until the page finishing loading. When t

Demand, what is ment by demand

what is ment by demand

Elasticity deman, use the concept of the income elasticity of demand to exp...

use the concept of the income elasticity of demand to explain the difference necessities, luxuries and inferior goods

Explain opportunity costs using a ppf, Explain opportunity costs using a PP...

Explain opportunity costs using a PPF where investment goods are on one axis and consumption goods on the other. Again, a good definition of opportunity costs linked to the not

Microeconomic international policy, Ask questi‘Social welfare functions emb...

Ask questi‘Social welfare functions embody a normative conception of the relative importance of equity and efficiency’. With the aid of diagrams, illustrate and explain this propos

Consider an upstream firm in russia that mines iron, Consider an upstream f...

Consider an upstream firm in Russia that mines iron ore at a total cost of $15 q , where q is the number of tons of ore. This upstream firm then ships ore to Germany for processi

Concepts of education and economic development - education, Normal 0 ...

Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

Compute the after-tax cost of debenture, A 5-years Rs.100 debenture of a fi...

A 5-years Rs.100 debenture of a firm can be sold for a net price of Rs. 96.50. The coupon rate of interest is 14 per cent per annum, and the debenture will be redeemed at 5 per cen

Concept of stock replenishment, Concept of Stock Replenishment  This c...

Concept of Stock Replenishment  This concept assumes that stock is always available whether there is demand or not. Consider the demand for constituent items, such as componen

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