Explain the meaning of deficit in the balance of payments.
Download our app for free and get started
A deficit in the Balance of Payments occurs when the autonomous inflow of foreign exchange falls short of autonomous outflow during the year. If there is a deficit in the BOP, then government needs to generate additional foreign exchange inflows.
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 SolutionCalculate the open economy multiplier with proportional taxes, T = tY , instead of lump-sum taxes as assumed in the text.
- 2View SolutionList the items of the current account of balance of payments account. Also, define ‘balance of trade’.
- 3View SolutionIn which sub-account and on which side of balance of payments account will foreign investments in India be recorded? Give reasons.
- 4View SolutionDistinguish between balance of trade and balance on current account.
- 5View SolutionForeign exchange rate in India is on the rise recently. What impact is it likely to have on exports and how?
- 6View SolutionRecently Government of India has doubled the import duty on gold. What impact is it likely to have on foreign exchange rate and how?
- 7View SolutionIf balance of trade is showing a deficit of ₹ 10,000 and value of exports is ₹ 15,000, then the value of imports will be ₹ 25,000. (True/ False)
- 8View SolutionDistinguish between balance of trade and balance on current account.
- 9View SolutionCan there be a deficit in Balance of Trade without a deficit in Balance of Payments?
- 10View SolutionWhen price of a foreign currency falls, the supply of that foreign currency also falls. Explain, why.