Balance of payments and developing economies, Microeconomics

Assignment Help:

Balance of Payments and Developing Economies:

It is well-known in development economics that UDCs invariably start as debtor economies. In the process of development itself, these economies have to import a great deal of capital goods, consumer goods, food and raw materials and spares and components. They also have to import some new technologies and, hence, the total exchange outgo cannot be matched by export earnings. But, it is expected that in a decade or two, as the new capital goods and technologies begin to become effective and their products are directed towards exports, export goods and services become competitive in cost and quality. In that case, the volume of exports expands and, in due course, begins to overtake imports. A developing economy then moves on from being a debtor economy to a balanced one in terms of BOP and, finally, becomes a creditor economy, exporting more than it imports and giving credit to buyers. Thus, from being a net debtor in the beginning, it becomes a net creditor in the end and, in fact, begins to invest abroad rather than have others lending to and investing in it.   


Related Discussions:- Balance of payments and developing economies

Name the five types of capital, Name the five types of capital. The fiv...

Name the five types of capital. The five types of capital are:  natural capital, manufactured capital, human capital, social capital and financial capital.

What is high-powered money, What is "high-powered money"?  The "high-po...

What is "high-powered money"?  The "high-powered money" is the similar as monetary base, which is defined, at the minimum, as the sum of the currency in circulation (banknotes

Exchange rates, EXCHANGE RATES: The current unit focuses on exchange r...

EXCHANGE RATES: The current unit focuses on exchange rates and is a more in-depth study of foreign exchange markets from the perspective of financialeconomics.You have been ac

Industry''s long-run supply curve, The Industry's Long-Run Supply Curve ...

The Industry's Long-Run Supply Curve * Long-Run Elasticity of Supply   1) Constant-cost industry Long run supply is horizontal Small increase in price will induc

Distinguish between fiscal and monetary policy, Problem: (a) Distingui...

Problem: (a) Distinguish between fiscal and monetary policy, giving examples where appropriate. (b) Explain how fiscal and monetary policies might be used by a government

Perform a threshold analysis, You are a member of a problem solving group t...

You are a member of a problem solving group that is concerned with incidents involving losses with their information system (IS). Let us assume that IS loss events can be grouped i

Tax, if the inverse demand curve is p = 120 - Q and the marginal cost is co...

if the inverse demand curve is p = 120 - Q and the marginal cost is constant at 10, how does charging the monopoly optimum and the welfare of consumers, the monopoly, and society?

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd