Describe the meaning of deficit in BOP
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.
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.
Who won the Nobel Prize for Economics in 1997?
Autonomous or public investment: It is a type of investment that is not of profit motivated.
Assume that El Salvador can generate coffee at lower opportunity costs than Spain, whereas Spain can generate olive oil at lower opportunity costs than El Salvador. The citizens of both countries can potentially profit from international trade since of the efficiency
If the Chinese economy could create all goods with fewer resources per unit than are needed in US, the citizens of China would: (i) Encompass a comparative advantage in the whole thing. (ii) Be self-sufficient since there would be no potential profits from trade. (iii
Managed floating exchange rate: This is a system in which the central bank or Government permits the exchange rate to identify market forces although they take decisions to intervene whenever they feel it suitable.
When Balance of payment of a country is Rs (-) 100 crores and total payment are Rs 500 crores. Determine its total receipts.
‘The pound has enhanced today on the foreign exchange market’ is a general media comment whenever the pound sterling appreciates. When the pound appreciates is it always excellent news for business and the economy?’
5. What are the factors responsible for the recent surge in international portfolio investment?
‘Can foreign exchange markets be analyzed in similar manner as the markets for ordinary physical commodities? Do demand slope downwards and supply slope upwards for currencies?’
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