Component of balance payments, Macroeconomics

Component of balance payment:

BOP is a statement  that summarises all the economic transactions between residents (individuals, companies and other organisations) of the home country  and those of all other countries. BOP accounting  uses  the  system of double-entry book-keeping meaning  thereby that every debit and credit in the account is also represented as a credit or debit somewhere else. Current Account and Capital Account are the  two most important components of BOP. The following  is a brief review of  the concepts.

BOP on Current Account kcords flows of goods and services, and unilateral transfers such as gifts. The merchandise trade account is a major part of BOP for most countries. 1f merchandise exports of  a  country exceeds  its  Conversely, if  imports exceeds exports,  an unfavourable  balance of trade arises. In  short, the difference between such exports and imports is termed as trade balance. 

Non-merchandise items are known as invisibles. These are sub-divided into services, investment income and  transfer payments. Services include travel and tourism, transportation, financial,  insurance, government and a variety of miscellaneous services. For instance, India's software services have recently been the fastest growing  services exports.  Investment income refers to receipts and payments of dividends, interest and profit arising out of Indian investment abroad and  foreign investment in India. Transfer payments usually are in the nature of foreign aid, grants, gifts and  foreign workers' remittances to their home countries. NRI's  remittances  are  significant component of  transfer payments in India.  

Posted Date: 11/9/2012 4:50:20 AM | Location : United States







Related Discussions:- Component of balance payments, Assignment Help, Ask Question on Component of balance payments, Get Answer, Expert's Help, Component of balance payments Discussions

Write discussion on Component of balance payments
Your posts are moderated
Related Questions
What is the difference in changing the scope between a spiral approach and a waterfall approach? Ans) The scope of needs changes in Waterfall model is less than that in Spiral M

In a Poisson distribution U=4. A) What is the probability that X=2? B) What is the probability that X is 2?

Define the term- Wages and income Remember that by wage we mainly mean what you receive for working one hour, whereas income is the total revenue from all sources over a longe

What are the instruments of monetary policies

What is the difference between heckscher_olin theory and comparative theory

can a country have a current account deficit and a capital account deficit at the same time?

What is the study of economics about?

A telemarketer makes six phone calls per hour and is able to make a sale on 30 percent of these contacts. During the next two hours, find: A) The probability of making exactly four

The resource based model identifies four criteria that firms can use to evaluate whether particular resources and capabilities are core competencies and can therefore, provide a ba

Suppose that the yield curve is flat at 5% per annum with continuous compounding. A swap with a notional principal of $100 million in which 6% is received and six-month LIBOR is pa