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special drawing rights sdrthese are international reserve currencies created by the international monetary fund imf to overcome the problems of
borrowing facilitiesif a countrys currency is not convertible it can borrow from countries whose currencies are convertible and use the convertible
convertible national currenciescurrencies are convertible when holders can freely exchange them for other currencies there are several advantages in
goldalthough currently no country uses gold as its national currency gold has a long history of use as commodity money and has almost universal
international liquidityinternational liquidity is the name given to the assets which central banks use to influence the external value of their
long-term policiesone long term option of tackling balance of payments deficit is export promotion in the long run this is the best method of
short-term policiesdeflation is a policy of reducing expenditure with the intention of curing a deficit by reducing the demand for imports this
policies to cure balance of payment deficitsthe measures available to tackle balance of payments deficits include short term measures such as
equilibrium and disequilibrium in the balance of paymentsif on the current account the value of exports is equal to the value of imports the balance
the balancing itemsince for ever position entry in the current and capital accounts there is a corresponding negative entry in the monetary account
the monetary accountalso called official financing this comprises the financial transactions of the government handled by the central bank needed to
capital accountthis records all transactions arising from capital movements into and out of the country there are a variety of such capital flows
the current accountthis records all transactions involving the exchange of currently produced goods and services and is subdivided intoi
balance of paymentsthe balance of payments of a country is a record of all financial transactions between residents of that country and residents of
a complementary facility for commodity-related shortfalls in export earningsthis is the most recent proposal of the group of 77 at unctad in june
stabexthe stabex scheme was designed to stabilize earnings from exports of the african caribbean and pacific acp countries to the community it
compensatory financingtwo other schemes for alleviating the effects of commodity trade instability have been operating for a number of years
the uns integrated programme for commoditiesmost of the political pressure for icas comes from spokesmen for the developing countries this is
objectives of icasmost schemes have as their main objective to stabilize andor increase the world price of commodity producers incomes foreign
international commodity agreements icasinternational commodity agreements icas represents attempts to modify the operation of the commodity markets
factors affecting the long run trend of the terms of trade for developing countriesmost third world countries have been faced by a fall in their
terms of tradethe relation between the prices of a countrys exports and the prices of its imports represented arithmetically by taking the export
arguments against protectionism most of the arguments for protectionism may be met with counter arguments but underlying the economic arguments as
strategic reasonsfor political or strategic reasons a country may not wish to be dependent upon imports and so may protect a home industry even if it
danger of over-specialising a country may feel that in its long-term interests it should not be too specializeda country may not wish to abandon