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

Monopoly, what the third degree price discrimination with case study of two...

what the third degree price discrimination with case study of two successfull and unsuccessfull cases?

Eoq formula, EOQ formula  The EOQ equation assumes demand is constant ...

EOQ formula  The EOQ equation assumes demand is constant and steady. It also assumes that demand for different items is independent. This is inappropriate for controlling inve

Microeconomics and the market system, Suppose you are a painter, and the pr...

Suppose you are a painter, and the price of a gallon of paint increases from $3.00 a gallon t $3.50 a gallon. Your usage of paint drops from 35 gallons to 20 gallons a month. 1. Co

Pooling, pooling in insurance

pooling in insurance

Central planning of economic system, Q. Central Planning of economic system...

Q. Central Planning of economic system? Central Planning: An economic system in that crucial decisions regarding consumption, investment, exchange rates, interest rates and pri

The production possibilities frontier (ppf), The Production Possibilities F...

The Production Possibilities Frontier (PPF) The PPF curve exhibits the probable combinations of goods and services accessible to an economy, given that all productive resources

What is Critical Temperature?, What is What is Critical Temperature? Why Cr...

What is What is Critical Temperature? Why Critical Temperature is Specified in Equation? Describe critical temperature specification...

Tropospheric pollution or Air pollution, Air is one of the important consti...

Air is one of the important constituent in the environment that is prone to pollution. Pollution of air refers to that part of atmosphere which is very nearest to the earth’s surf

Graphical methods - trend projection methods, A trend line can be fitted th...

A trend line can be fitted through a series graphically. Old values of sales for different areas are plotted on a graph and a free hand curve is drawn passing through as many point

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