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

Special drawing rights - imf, Special Drawing Rights: The late 1960s w...

Special Drawing Rights: The late 1960s witnessed that the growth in world resources did not keep pace with the growth in international trade. The slackness in the growth of re

Theory of supply, how to make attractive assignment on theory of supply

how to make attractive assignment on theory of supply

Consumer surplus, What is consumer surplus? What is its significance and wh...

What is consumer surplus? What is its significance and what causes it to change?

Quality control - export strategy, Quality Control: Standards and sta...

Quality Control: Standards and standardisation, quality systems, certification and inspections, measurement systems, testing laboratories, their accreditation and calibration

Pareto efficiency, how to find pareto efficient output using algebra

how to find pareto efficient output using algebra

Gdp, how to write an overall introduction about gdp?

how to write an overall introduction about gdp?

Four-firm concentration ratios , a) The four-firm concentration ratios for ...

a) The four-firm concentration ratios for the following industries have been found from the Economic Census for Manufacturing (NAICS 31-33) as follows. The four-firm concentration

Dynamic changes in costs: the learning curve, Dynamic Changes in Costs: The...

Dynamic Changes in Costs: The Learning Curve *  The learning curve measures impact of worker's experience on costs of production. *  It describes relationship between a firm

Define the price ceiling, Define the price ceiling A price ceiling is a h...

Define the price ceiling A price ceiling is a highest price that sellers can charge for a product.

Consumer''s equilibrium, using necessary and sufficient conditions explain ...

using necessary and sufficient conditions explain consumer equilibrium diagrammatically as well as mathematically

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