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

Health Reform, Healthcare Reform is currently in the news almost every day....

Healthcare Reform is currently in the news almost every day. The current approach proposes a government sponsored health insurance “market” to help control costs and make healthcar

Balance of payment, Balance of payment: It is an account that summariz...

Balance of payment: It is an account that summarizes a country’s total payments and total receipts from international economic transactions within a specific period usually on

Evalution - credit and recoveries, "Micron" is a company,providing micro fi...

"Micron" is a company,providing micro financing facility for various business entities.So far Micron has been in operation for seven years facilitating new business ventures and ex

What is hicksian demand function, What is Hicksian demand function? Hic...

What is Hicksian demand function? Hicksian Demand Function: The solution of expenditure function that is the function of (p, u) is denoted by h(p, u) and termed as the Hicks

Substantial practical value, The cross elasticity of demand calculates the ...

The cross elasticity of demand calculates the responsiveness of the quantity demanded of one product to alters in the price of another product.  For example, the quantity demanded

What are the functions of money, Functions of Money Money performs sev...

Functions of Money Money performs several important functions. It serves as a medium of exchange, a unit of account, a store of value and a standard of deferred payments. In a

Capacity utilization, discuss ho capacity utilization and product different...

discuss ho capacity utilization and product differentiation affect internal rivalry and entry barriers with the analytical framework of the porter five forces model. use the econom

Total, Compare and contrast the different measures of revenue

Compare and contrast the different measures of revenue

Price mechanism, discuss the term of price mechanism,give examples to elabo...

discuss the term of price mechanism,give examples to elaborate the concept clearly

Sample survey and test marketing, Sample Survey and Test Marketing: Under...

Sample Survey and Test Marketing: Under this method some representative households are selected on random basis as samples and their opinion is taken as the generalized opinio

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