Can there be a deficit in Balance of Trade without a deficit in Balance of Payments?
Download our app for free and get started
Yes, there can be a deficit in Balance of Trade without a deficit in Balance of Payments. BoT is only a component of current account of BoP, which includes only exports and imports of goods. However, BOP includes both current as well as capital account, hence there is a much wider scope.
Download our appand get started for free
Experience the future of education. Simply download our apps or reach out to us for more information. Let's shape the future of learning together!No signup needed.*
Similar Questions
- 1View SolutionDistinguish between the nominal exchange rate and the real exchange rate. If you were to decide whether to buy domestic goods or foreign goods, which rate would be more relevant? Explain.
- 2View SolutionExplain four sources of supply of foreign exchange.
- 3View SolutionWhen price of a foreign currency falls, the supply of that foreign currency also falls. Explain, why.
- 4View SolutionExplain the meaning and significance of deficit in Balance of Payments.
- 5View SolutionExplain the effect of appreciation of domestic currency on exports.
- 6View SolutionDistinguish between balance of trade and balance on current account.
- 7View SolutionExplain the effect of appreciation of domestic currency on imports.
- 8View SolutionWould the Central Bank need to intervene in managed floating system? Explain why?
- 9View SolutionState components of the current account of balance of payments account.
- 10View SolutionExplain any two merits of fixed exchange rate.