Define balance of payment or BOP
Balance of payment: It is a systematic record of each and every economic transaction of a country with the rest of world in an accounting year.
Assume that many people are willing and capable to pay greater than production costs for certain goods however pervasive shortages exist. International agreements or domestic laws and policy are most likely key factors if we consider sustained scarcities in ma
Describe the meaning of deficit in BOP: Whenever autonomous foreign exchange payments surpass autonomous foreign exchange receipts, the difference is termed as balance of payments deficit.
The practice considers the Treasury’s elucidation of the consequence on macroeconomic adjustment of joining the euro.
Question 1 Household Tools Co. is a manufacturer of microwave ovens. The manufacturer wants to increase the shelf life of their products. Past records indicate that the average shelf life of their microwave ovens is 240 days. After a new line of microwave ovens has been d
The U.S. economy is an instance of a system characterized by: (1) Mixture of different aspects of various economic systems. (2) Strictly decentralized the decision making process. (3) Centralized ownership of resources. (4) Political decisions regarding all allocative
The simple circular flow model of a private economy describes how income and resources flow among: (1) Households and business associations. (2) Corporations and government agencies. (3) Sole corporations and proprietorship (4) Business associations a
Why foreign currency or exchange is required? Answer: a) To buy services and goods from other countries. b) To send a gift abroad. c) To buy financial assets in a specific country and d) To contem
Components of current account of BOP account: (A) Import-Export of goods(B) Import-Export of services(C) Unilateral transfers
Fixed exchange rate system (or pegged exchange rate system): This is a system in which exchange rate of a currency is fixed by government. This system makes sure stability in the foreign trade and capital movement.
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