The balancing item, Managerial Economics

Assignment Help:

THE BALANCING ITEM

Since for ever position entry in the current and capital accounts there is a corresponding negative entry in the monetary account, and for every negative entry in the first two accounts there is a corresponding positive entry in the monetary account, it follows that the balance of payments must balance i.e. the sum of the balances of all the three accounts must add up to zero.

In practice, this is usually not the case because there are so many transactions that take place, and due to human errors some may be recorded correctly in one account but incorrect in another account with the result that the sum of the tree balances may not be zero.  The actual discrepancy in the records can be calculated.  The balancing item represents the sum of all errors and omissions.  If it is positive, it means that there have been unrecorded net exports while a negative entry means that there have been unrecorded net imports.


Related Discussions:- The balancing item

Indirect taxes, INDIRECT TAXES These are imposed on an individual most...

INDIRECT TAXES These are imposed on an individual mostly producers or traders but they can be passed on to be borne by others usually the final consumers.  They can also be de

How pollution can make the market equilibrium inefficient, In regards to ai...

In regards to air pollution, use a diagram to show and explain how the existence of pollution can make the market equilibrium inefficient.

Pilgrim Bank Case, Your discussion assignment this week is associated with ...

Your discussion assignment this week is associated with the Pilgrim Bank case. Using the attached file, answer the following questions: A. Is there a difference in profitability ac

Banking system, T HE BANKING SYSTEM Consists of all those institutions...

T HE BANKING SYSTEM Consists of all those institutions which determine the supply of money.  The main element of the Banking System is the Commercial Bank (in Kenya).  The sec

Applications of managerial theories and concepts in decision, Discuss the a...

Discuss the applications of Managerial economics concepts or theories in managerial decision making question..

Fixed exchange rate, Country A has a fixed exchange rate with country B. Du...

Country A has a fixed exchange rate with country B. Due to a recession in country B, demand for A's goods falls. Draw what would happen on the graph below. On the graphs, draw what

Illustrate about forecasting in management, Illustrate about forecasting in...

Illustrate about forecasting in management A forecast expert has been asked to provide quarterly estimates of the sales volume for a specific product for the next four quarters

Product of marginal revenue, Q. Product of marginal revenue? MRPL is th...

Q. Product of marginal revenue? MRPL is the product of marginal revenue and marginal product of labour or MRPL = MR x MPL. • Derivation: MR = ?TR/?Q MPL = ?Q/?L

Show the williamson''s approach for team production, For Oliver E. Williams...

For Oliver E. Williamson, existence of firms derives from 'asset specificity' in production, where assets are specific to each other such that their value is much less in a second-

Calculate the percentage of the disk space that must be free, Free disk spa...

Free disk space can be kept track of using a free list or a bit map. Disk addresses require D bits. For a disk with B blocks, F of which are free, state the condition under which t

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