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

Law of supply, what is the importance of law of supply

what is the importance of law of supply

Concentration ratio cr4, "If for a certain market, the concentration ratio ...

"If for a certain market, the concentration ratio CR4 (the combined market share of the 4 largest firms) is 1, its Herfindahl index is at least 0.25." Describe the given statement.

Effects of price changes, Question 1: Tourism is often seen as a way of...

Question 1: Tourism is often seen as a way of generating income, particularly foreign exchange. The economic spin-off effects are viewed as the most important aspect of touris

Herfendahl index, #qu3. An industry is composed of 20 firms, all with equal...

#qu3. An industry is composed of 20 firms, all with equal sales. The Herfendahl Index ratio in this industry is a. 1000 b. 500 c. 800 d. This cannot be determined from the informat

Factor markets, A firm in a perfectly competitive product market takes the ...

A firm in a perfectly competitive product market takes the price of the product as given. Similarly, a firm in a perfectly competitive factor market takes the price of the factor

I dont understand this, Joe Brown’s dairy operates in a perfectly competiti...

Joe Brown’s dairy operates in a perfectly competitive marketplace. Joe’s machinery costs $500 per day and is the only fixed input. His variable costs are comprised of the wages pai

Externalities, What is a negative externality?

What is a negative externality?

Deductive and inductive methods, what are the merits and demerits of deduct...

what are the merits and demerits of deductive inductive methods in economic analysis?

Nature and types of resource, Normal 0 false false false ...

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

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