Commerce Exam > Commerce Questions > Read the news report given below and answer ...
Start Learning for Free
Read the news report given below and answer the question that follow on the basis of the same:
A lower trade deficit along with strong FDI and portfolio flows in F/Y 19 January-March quarter may help the external sector balance sheet and prop up both current account as well as the overall balance of payments numbers. This could reflect a lower current account deficit in the balance of payments for the quarter ended March. Trade balance, an important component of the current account, is estimated at a deficit of $35.6 billion for Q4 compared to $40.6 billion in the same period a year ago, thanks to lower crude prices and slowdown in gold and other imports. Other factors influencing the current account are software services income and remittances by overseas Indians. Market estimates for the F/Y 19 March quarter current account deficit is at $8.1 billion versus $13.2 billion for March’18 quarter.
In the capital account, thanks to some bidding for defaulting companies by ArcelorMittal which are expected to have bought in some funds, FDI inflows in March is projected to be almost double the amount in the previous comparable period of March’18. Also, external commercial borrowing flows in the latest quarter are almost double the amount of the previous comparable quarter ending March’18. In addition, forex resources raised through the swap agreements with the commercial banks are expected to add another $5 billion through the foreign investment route. The overall balance of payments surplus is estimated higher at $17 billion for the latest March quarter compared to the $13 billion surplus in the March’18 quarter.
Q. FDI inflows in March is a type of _____________.
- a)Accommodating transactions
- b)Accumulating transactions
- c)Autonomous transactions
- d)None of the above
Correct answer is option 'C'. Can you explain this answer?
| FREE This question is part of | Download PDF Attempt this Test |
Most Upvoted Answer
Read the news report given below and answer the question that follow ...
Foreign direct investments are autonomous transactions of long-term capital movements, motivated by economic interests, with the profit in the first place.
Free Test
FREE
| Start Free Test |
Community Answer
Read the news report given below and answer the question that follow ...
Understanding FDI Inflows as Autonomous Transactions
Foreign Direct Investment (FDI) inflows are classified as autonomous transactions due to their nature and implications on the economy.
What are Autonomous Transactions?
- Autonomous transactions refer to transactions that occur independently of the current account balance.
- These transactions are motivated by profit-seeking or strategic business interests rather than short-term financial considerations.
Characteristics of FDI Inflows
- Long-Term Investment: FDI involves substantial capital investment in physical or operational assets in a foreign country, indicating a long-term commitment.
- Business Operations: Companies often establish or acquire businesses abroad to expand their market presence, leading to sustainable economic benefits.
- Influence on Growth: FDI can positively impact the host country's economy by creating jobs, transferring technology, and boosting exports.
Why FDI is Considered Autonomous?
- Independence from Current Account: FDI inflows are not directly influenced by the balance of trade or current account deficits. Instead, they reflect the strategic decisions of businesses.
- Economic Stability: A higher level of FDI can help stabilize a country’s balance of payments by providing a steady inflow of foreign funds, independent of trade deficits.
Conclusion
In the context of the news report, the increase in FDI inflows in March is indicative of autonomous transactions as they are driven by long-term business interests and are less influenced by short-term economic fluctuations. This is vital for enhancing the overall balance of payments and promoting economic stability.
Foreign Direct Investment (FDI) inflows are classified as autonomous transactions due to their nature and implications on the economy.
What are Autonomous Transactions?
- Autonomous transactions refer to transactions that occur independently of the current account balance.
- These transactions are motivated by profit-seeking or strategic business interests rather than short-term financial considerations.
Characteristics of FDI Inflows
- Long-Term Investment: FDI involves substantial capital investment in physical or operational assets in a foreign country, indicating a long-term commitment.
- Business Operations: Companies often establish or acquire businesses abroad to expand their market presence, leading to sustainable economic benefits.
- Influence on Growth: FDI can positively impact the host country's economy by creating jobs, transferring technology, and boosting exports.
Why FDI is Considered Autonomous?
- Independence from Current Account: FDI inflows are not directly influenced by the balance of trade or current account deficits. Instead, they reflect the strategic decisions of businesses.
- Economic Stability: A higher level of FDI can help stabilize a country’s balance of payments by providing a steady inflow of foreign funds, independent of trade deficits.
Conclusion
In the context of the news report, the increase in FDI inflows in March is indicative of autonomous transactions as they are driven by long-term business interests and are less influenced by short-term economic fluctuations. This is vital for enhancing the overall balance of payments and promoting economic stability.
Attention Commerce Students!
To make sure you are not studying endlessly, EduRev has designed Commerce study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in Commerce.
|
Explore Courses for Commerce exam
|
|
Top Courses for CommerceView all
Read the news report given below and answer the question that follow on the basis of the same: A lower trade deficit along with strong FDI and portfolio flows in F/Y 19 January-March quarter may help the external sector balance sheet and prop up both current account as well as the overall balance of payments numbers. This could reflect a lower current account deficit in the balance of payments for the quarter ended March. Trade balance, an important component of the current account, is estimated at a deficit of $35.6 billion for Q4 compared to $40.6 billion in the same period a year ago, thanks to lower crude prices and slowdown in gold and other imports. Other factors influencing the current account are software services income and remittances by overseas Indians. Market estimates for the F/Y 19 March quarter current account deficit is at $8.1 billion versus $13.2 billion for March’18 quarter.In the capital account, thanks to some bidding for defaulting companies by ArcelorMittal which are expected to have bought in some funds, FDI inflows in March is projected to be almost double the amount in the previous comparable period of March’18. Also, external commercial borrowing flows in the latest quarter are almost double the amount of the previous comparable quarter ending March’18. In addition, forex resources raised through the swap agreements with the commercial banks are expected to add another $5 billion through the foreign investment route. The overall balance of payments surplus is estimated higher at $17 billion for the latest March quarter compared to the $13 billion surplus in the March’18 quarter.Q. FDI inflows in March is a type of _____________.a)Accommodating transactionsb)Accumulating transactionsc)Autonomous transactionsd)None of the aboveCorrect answer is option 'C'. Can you explain this answer?
Question Description
Read the news report given below and answer the question that follow on the basis of the same: A lower trade deficit along with strong FDI and portfolio flows in F/Y 19 January-March quarter may help the external sector balance sheet and prop up both current account as well as the overall balance of payments numbers. This could reflect a lower current account deficit in the balance of payments for the quarter ended March. Trade balance, an important component of the current account, is estimated at a deficit of $35.6 billion for Q4 compared to $40.6 billion in the same period a year ago, thanks to lower crude prices and slowdown in gold and other imports. Other factors influencing the current account are software services income and remittances by overseas Indians. Market estimates for the F/Y 19 March quarter current account deficit is at $8.1 billion versus $13.2 billion for March’18 quarter.In the capital account, thanks to some bidding for defaulting companies by ArcelorMittal which are expected to have bought in some funds, FDI inflows in March is projected to be almost double the amount in the previous comparable period of March’18. Also, external commercial borrowing flows in the latest quarter are almost double the amount of the previous comparable quarter ending March’18. In addition, forex resources raised through the swap agreements with the commercial banks are expected to add another $5 billion through the foreign investment route. The overall balance of payments surplus is estimated higher at $17 billion for the latest March quarter compared to the $13 billion surplus in the March’18 quarter.Q. FDI inflows in March is a type of _____________.a)Accommodating transactionsb)Accumulating transactionsc)Autonomous transactionsd)None of the aboveCorrect answer is option 'C'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Read the news report given below and answer the question that follow on the basis of the same: A lower trade deficit along with strong FDI and portfolio flows in F/Y 19 January-March quarter may help the external sector balance sheet and prop up both current account as well as the overall balance of payments numbers. This could reflect a lower current account deficit in the balance of payments for the quarter ended March. Trade balance, an important component of the current account, is estimated at a deficit of $35.6 billion for Q4 compared to $40.6 billion in the same period a year ago, thanks to lower crude prices and slowdown in gold and other imports. Other factors influencing the current account are software services income and remittances by overseas Indians. Market estimates for the F/Y 19 March quarter current account deficit is at $8.1 billion versus $13.2 billion for March’18 quarter.In the capital account, thanks to some bidding for defaulting companies by ArcelorMittal which are expected to have bought in some funds, FDI inflows in March is projected to be almost double the amount in the previous comparable period of March’18. Also, external commercial borrowing flows in the latest quarter are almost double the amount of the previous comparable quarter ending March’18. In addition, forex resources raised through the swap agreements with the commercial banks are expected to add another $5 billion through the foreign investment route. The overall balance of payments surplus is estimated higher at $17 billion for the latest March quarter compared to the $13 billion surplus in the March’18 quarter.Q. FDI inflows in March is a type of _____________.a)Accommodating transactionsb)Accumulating transactionsc)Autonomous transactionsd)None of the aboveCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Read the news report given below and answer the question that follow on the basis of the same: A lower trade deficit along with strong FDI and portfolio flows in F/Y 19 January-March quarter may help the external sector balance sheet and prop up both current account as well as the overall balance of payments numbers. This could reflect a lower current account deficit in the balance of payments for the quarter ended March. Trade balance, an important component of the current account, is estimated at a deficit of $35.6 billion for Q4 compared to $40.6 billion in the same period a year ago, thanks to lower crude prices and slowdown in gold and other imports. Other factors influencing the current account are software services income and remittances by overseas Indians. Market estimates for the F/Y 19 March quarter current account deficit is at $8.1 billion versus $13.2 billion for March’18 quarter.In the capital account, thanks to some bidding for defaulting companies by ArcelorMittal which are expected to have bought in some funds, FDI inflows in March is projected to be almost double the amount in the previous comparable period of March’18. Also, external commercial borrowing flows in the latest quarter are almost double the amount of the previous comparable quarter ending March’18. In addition, forex resources raised through the swap agreements with the commercial banks are expected to add another $5 billion through the foreign investment route. The overall balance of payments surplus is estimated higher at $17 billion for the latest March quarter compared to the $13 billion surplus in the March’18 quarter.Q. FDI inflows in March is a type of _____________.a)Accommodating transactionsb)Accumulating transactionsc)Autonomous transactionsd)None of the aboveCorrect answer is option 'C'. Can you explain this answer?.
Read the news report given below and answer the question that follow on the basis of the same: A lower trade deficit along with strong FDI and portfolio flows in F/Y 19 January-March quarter may help the external sector balance sheet and prop up both current account as well as the overall balance of payments numbers. This could reflect a lower current account deficit in the balance of payments for the quarter ended March. Trade balance, an important component of the current account, is estimated at a deficit of $35.6 billion for Q4 compared to $40.6 billion in the same period a year ago, thanks to lower crude prices and slowdown in gold and other imports. Other factors influencing the current account are software services income and remittances by overseas Indians. Market estimates for the F/Y 19 March quarter current account deficit is at $8.1 billion versus $13.2 billion for March’18 quarter.In the capital account, thanks to some bidding for defaulting companies by ArcelorMittal which are expected to have bought in some funds, FDI inflows in March is projected to be almost double the amount in the previous comparable period of March’18. Also, external commercial borrowing flows in the latest quarter are almost double the amount of the previous comparable quarter ending March’18. In addition, forex resources raised through the swap agreements with the commercial banks are expected to add another $5 billion through the foreign investment route. The overall balance of payments surplus is estimated higher at $17 billion for the latest March quarter compared to the $13 billion surplus in the March’18 quarter.Q. FDI inflows in March is a type of _____________.a)Accommodating transactionsb)Accumulating transactionsc)Autonomous transactionsd)None of the aboveCorrect answer is option 'C'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Read the news report given below and answer the question that follow on the basis of the same: A lower trade deficit along with strong FDI and portfolio flows in F/Y 19 January-March quarter may help the external sector balance sheet and prop up both current account as well as the overall balance of payments numbers. This could reflect a lower current account deficit in the balance of payments for the quarter ended March. Trade balance, an important component of the current account, is estimated at a deficit of $35.6 billion for Q4 compared to $40.6 billion in the same period a year ago, thanks to lower crude prices and slowdown in gold and other imports. Other factors influencing the current account are software services income and remittances by overseas Indians. Market estimates for the F/Y 19 March quarter current account deficit is at $8.1 billion versus $13.2 billion for March’18 quarter.In the capital account, thanks to some bidding for defaulting companies by ArcelorMittal which are expected to have bought in some funds, FDI inflows in March is projected to be almost double the amount in the previous comparable period of March’18. Also, external commercial borrowing flows in the latest quarter are almost double the amount of the previous comparable quarter ending March’18. In addition, forex resources raised through the swap agreements with the commercial banks are expected to add another $5 billion through the foreign investment route. The overall balance of payments surplus is estimated higher at $17 billion for the latest March quarter compared to the $13 billion surplus in the March’18 quarter.Q. FDI inflows in March is a type of _____________.a)Accommodating transactionsb)Accumulating transactionsc)Autonomous transactionsd)None of the aboveCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Read the news report given below and answer the question that follow on the basis of the same: A lower trade deficit along with strong FDI and portfolio flows in F/Y 19 January-March quarter may help the external sector balance sheet and prop up both current account as well as the overall balance of payments numbers. This could reflect a lower current account deficit in the balance of payments for the quarter ended March. Trade balance, an important component of the current account, is estimated at a deficit of $35.6 billion for Q4 compared to $40.6 billion in the same period a year ago, thanks to lower crude prices and slowdown in gold and other imports. Other factors influencing the current account are software services income and remittances by overseas Indians. Market estimates for the F/Y 19 March quarter current account deficit is at $8.1 billion versus $13.2 billion for March’18 quarter.In the capital account, thanks to some bidding for defaulting companies by ArcelorMittal which are expected to have bought in some funds, FDI inflows in March is projected to be almost double the amount in the previous comparable period of March’18. Also, external commercial borrowing flows in the latest quarter are almost double the amount of the previous comparable quarter ending March’18. In addition, forex resources raised through the swap agreements with the commercial banks are expected to add another $5 billion through the foreign investment route. The overall balance of payments surplus is estimated higher at $17 billion for the latest March quarter compared to the $13 billion surplus in the March’18 quarter.Q. FDI inflows in March is a type of _____________.a)Accommodating transactionsb)Accumulating transactionsc)Autonomous transactionsd)None of the aboveCorrect answer is option 'C'. Can you explain this answer?.
Solutions for Read the news report given below and answer the question that follow on the basis of the same: A lower trade deficit along with strong FDI and portfolio flows in F/Y 19 January-March quarter may help the external sector balance sheet and prop up both current account as well as the overall balance of payments numbers. This could reflect a lower current account deficit in the balance of payments for the quarter ended March. Trade balance, an important component of the current account, is estimated at a deficit of $35.6 billion for Q4 compared to $40.6 billion in the same period a year ago, thanks to lower crude prices and slowdown in gold and other imports. Other factors influencing the current account are software services income and remittances by overseas Indians. Market estimates for the F/Y 19 March quarter current account deficit is at $8.1 billion versus $13.2 billion for March’18 quarter.In the capital account, thanks to some bidding for defaulting companies by ArcelorMittal which are expected to have bought in some funds, FDI inflows in March is projected to be almost double the amount in the previous comparable period of March’18. Also, external commercial borrowing flows in the latest quarter are almost double the amount of the previous comparable quarter ending March’18. In addition, forex resources raised through the swap agreements with the commercial banks are expected to add another $5 billion through the foreign investment route. The overall balance of payments surplus is estimated higher at $17 billion for the latest March quarter compared to the $13 billion surplus in the March’18 quarter.Q. FDI inflows in March is a type of _____________.a)Accommodating transactionsb)Accumulating transactionsc)Autonomous transactionsd)None of the aboveCorrect answer is option 'C'. Can you explain this answer? in English & in Hindi are available as part of our courses for Commerce.
Download more important topics, notes, lectures and mock test series for Commerce Exam by signing up for free.
Here you can find the meaning of Read the news report given below and answer the question that follow on the basis of the same: A lower trade deficit along with strong FDI and portfolio flows in F/Y 19 January-March quarter may help the external sector balance sheet and prop up both current account as well as the overall balance of payments numbers. This could reflect a lower current account deficit in the balance of payments for the quarter ended March. Trade balance, an important component of the current account, is estimated at a deficit of $35.6 billion for Q4 compared to $40.6 billion in the same period a year ago, thanks to lower crude prices and slowdown in gold and other imports. Other factors influencing the current account are software services income and remittances by overseas Indians. Market estimates for the F/Y 19 March quarter current account deficit is at $8.1 billion versus $13.2 billion for March’18 quarter.In the capital account, thanks to some bidding for defaulting companies by ArcelorMittal which are expected to have bought in some funds, FDI inflows in March is projected to be almost double the amount in the previous comparable period of March’18. Also, external commercial borrowing flows in the latest quarter are almost double the amount of the previous comparable quarter ending March’18. In addition, forex resources raised through the swap agreements with the commercial banks are expected to add another $5 billion through the foreign investment route. The overall balance of payments surplus is estimated higher at $17 billion for the latest March quarter compared to the $13 billion surplus in the March’18 quarter.Q. FDI inflows in March is a type of _____________.a)Accommodating transactionsb)Accumulating transactionsc)Autonomous transactionsd)None of the aboveCorrect answer is option 'C'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
Read the news report given below and answer the question that follow on the basis of the same: A lower trade deficit along with strong FDI and portfolio flows in F/Y 19 January-March quarter may help the external sector balance sheet and prop up both current account as well as the overall balance of payments numbers. This could reflect a lower current account deficit in the balance of payments for the quarter ended March. Trade balance, an important component of the current account, is estimated at a deficit of $35.6 billion for Q4 compared to $40.6 billion in the same period a year ago, thanks to lower crude prices and slowdown in gold and other imports. Other factors influencing the current account are software services income and remittances by overseas Indians. Market estimates for the F/Y 19 March quarter current account deficit is at $8.1 billion versus $13.2 billion for March’18 quarter.In the capital account, thanks to some bidding for defaulting companies by ArcelorMittal which are expected to have bought in some funds, FDI inflows in March is projected to be almost double the amount in the previous comparable period of March’18. Also, external commercial borrowing flows in the latest quarter are almost double the amount of the previous comparable quarter ending March’18. In addition, forex resources raised through the swap agreements with the commercial banks are expected to add another $5 billion through the foreign investment route. The overall balance of payments surplus is estimated higher at $17 billion for the latest March quarter compared to the $13 billion surplus in the March’18 quarter.Q. FDI inflows in March is a type of _____________.a)Accommodating transactionsb)Accumulating transactionsc)Autonomous transactionsd)None of the aboveCorrect answer is option 'C'. Can you explain this answer?, a detailed solution for Read the news report given below and answer the question that follow on the basis of the same: A lower trade deficit along with strong FDI and portfolio flows in F/Y 19 January-March quarter may help the external sector balance sheet and prop up both current account as well as the overall balance of payments numbers. This could reflect a lower current account deficit in the balance of payments for the quarter ended March. Trade balance, an important component of the current account, is estimated at a deficit of $35.6 billion for Q4 compared to $40.6 billion in the same period a year ago, thanks to lower crude prices and slowdown in gold and other imports. Other factors influencing the current account are software services income and remittances by overseas Indians. Market estimates for the F/Y 19 March quarter current account deficit is at $8.1 billion versus $13.2 billion for March’18 quarter.In the capital account, thanks to some bidding for defaulting companies by ArcelorMittal which are expected to have bought in some funds, FDI inflows in March is projected to be almost double the amount in the previous comparable period of March’18. Also, external commercial borrowing flows in the latest quarter are almost double the amount of the previous comparable quarter ending March’18. In addition, forex resources raised through the swap agreements with the commercial banks are expected to add another $5 billion through the foreign investment route. The overall balance of payments surplus is estimated higher at $17 billion for the latest March quarter compared to the $13 billion surplus in the March’18 quarter.Q. FDI inflows in March is a type of _____________.a)Accommodating transactionsb)Accumulating transactionsc)Autonomous transactionsd)None of the aboveCorrect answer is option 'C'. Can you explain this answer? has been provided alongside types of Read the news report given below and answer the question that follow on the basis of the same: A lower trade deficit along with strong FDI and portfolio flows in F/Y 19 January-March quarter may help the external sector balance sheet and prop up both current account as well as the overall balance of payments numbers. This could reflect a lower current account deficit in the balance of payments for the quarter ended March. Trade balance, an important component of the current account, is estimated at a deficit of $35.6 billion for Q4 compared to $40.6 billion in the same period a year ago, thanks to lower crude prices and slowdown in gold and other imports. Other factors influencing the current account are software services income and remittances by overseas Indians. Market estimates for the F/Y 19 March quarter current account deficit is at $8.1 billion versus $13.2 billion for March’18 quarter.In the capital account, thanks to some bidding for defaulting companies by ArcelorMittal which are expected to have bought in some funds, FDI inflows in March is projected to be almost double the amount in the previous comparable period of March’18. Also, external commercial borrowing flows in the latest quarter are almost double the amount of the previous comparable quarter ending March’18. In addition, forex resources raised through the swap agreements with the commercial banks are expected to add another $5 billion through the foreign investment route. The overall balance of payments surplus is estimated higher at $17 billion for the latest March quarter compared to the $13 billion surplus in the March’18 quarter.Q. FDI inflows in March is a type of _____________.a)Accommodating transactionsb)Accumulating transactionsc)Autonomous transactionsd)None of the aboveCorrect answer is option 'C'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice Read the news report given below and answer the question that follow on the basis of the same: A lower trade deficit along with strong FDI and portfolio flows in F/Y 19 January-March quarter may help the external sector balance sheet and prop up both current account as well as the overall balance of payments numbers. This could reflect a lower current account deficit in the balance of payments for the quarter ended March. Trade balance, an important component of the current account, is estimated at a deficit of $35.6 billion for Q4 compared to $40.6 billion in the same period a year ago, thanks to lower crude prices and slowdown in gold and other imports. Other factors influencing the current account are software services income and remittances by overseas Indians. Market estimates for the F/Y 19 March quarter current account deficit is at $8.1 billion versus $13.2 billion for March’18 quarter.In the capital account, thanks to some bidding for defaulting companies by ArcelorMittal which are expected to have bought in some funds, FDI inflows in March is projected to be almost double the amount in the previous comparable period of March’18. Also, external commercial borrowing flows in the latest quarter are almost double the amount of the previous comparable quarter ending March’18. In addition, forex resources raised through the swap agreements with the commercial banks are expected to add another $5 billion through the foreign investment route. The overall balance of payments surplus is estimated higher at $17 billion for the latest March quarter compared to the $13 billion surplus in the March’18 quarter.Q. FDI inflows in March is a type of _____________.a)Accommodating transactionsb)Accumulating transactionsc)Autonomous transactionsd)None of the aboveCorrect answer is option 'C'. Can you explain this answer? tests, examples and also practice Commerce tests.
|
|
Explore Courses for Commerce exam
|
|
Suggested Free Tests
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
Follow Us
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup