Capital account, Managerial Economics

CAPITAL ACCOUNT

This records all transactions arising from capital movements into and out of the country.  There are a variety of such capital flows recorded, namely:

i. Long term capital:

This consists of:

a.        Government to Government borrowing and lending

b.       Government borrowing from international organizations

c.        Investment by foreigners at home in such projects as factories, mines and plantations and by nationals abroad in similar projects.

d.       The buying of shares by foreigners in home companies and by nationals in foreign companies.

ii.   Short term capital ("hot money")

Refers to changes in bank balances held by foreigners in home banks and by nationals in foreign banks.

If money comes into the country (e.g. deliberate borrowing abroad by a domestic company or foreign investment in the country), it is recorded as a credit item, while investments abroad etc is recorded as a debit item.

When the current account and the capital account are combined, and we compare the total debits and credits, this is termed the balance for official financing (it used to be termed the  "total currency flow").  This shows the final net outflow, or inflow arising from current and capital transactions.

Posted Date: 11/30/2012 5:18:40 AM | Location : United States







Related Discussions:- Capital account, Assignment Help, Ask Question on Capital account, Get Answer, Expert's Help, Capital account Discussions

Write discussion on Capital account
Your posts are moderated
Related Questions
Q. Show the Properties of isoquants? Isoquants slope downwards to the right:   It means that, in order to keep output constant; when amount of one factor is increased then the

Disadvantages The effect on incentives High  progressive tax makes work and extra effort become less valuable. The effect on the willingness to accept risk

demand function is q=4850 - 5p(1) + 1.5p(2) + 0.1 Y WHEN Y=10000 p(1)=200 p(2)= 100 find income elasticity of demand for p(1)

Q.2. On the basis of the analysis of the case above, what is your opinion about legalizing marijuana in Canada ?mum 100 words accepted#

Normal 0 false false false EN-IN X-NONE X-NONE

Bank Deposit Bank notes and coins together constitute the currency in circulation.  But they form only a part of the total money supply.  The larger part of the money supply i

Hawtrey views about Trade Cycle Hawtrey views trade cycle as a purely monetary phenomenon. According to him, inventory cycles result from fluctuations caused in the desired rat

Theory of Demand of managerial economics According to Siegelman andSpencer "A business firm is an economic organisation that transforms productivity sources into goods which

The concept of point elasticity is applicable where change in price and the resulting change in quantity are infinite or small. Though, where change in price and consequent hunger

what are the limitation of managerial economics and what is the solution of it?