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At the state of equilibrium in balance of payments, there will be deficit in either of the accounts. Deficit in which account will be considered as better?
- a)Current account
- b)Capital account
- c)Both (a) and (b)
- d)Neither (a) nor (b)
Correct answer is option 'B'. Can you explain this answer?
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At the state of equilibrium in balance of payments, there will be defi...
A deficit in capital account of BoP is considered as better as it might lead to formation of assets or reduction of liabilities.
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At the state of equilibrium in balance of payments, there will be defi...
Deficit in the Capital Account is considered as better:
- Explanation:
- Current Account Deficit: A deficit in the current account signifies that a country is importing more goods and services than it is exporting. This can lead to a decrease in foreign exchange reserves and can indicate an imbalance in the economy.
- Capital Account Deficit: A deficit in the capital account means that a country is borrowing more capital from foreign sources than it is lending or investing abroad. This can be seen as a positive sign as it shows that the country is attracting foreign investments which can help in economic development.
- Importance of Capital Account:
- Economic Growth: Foreign investments can contribute to economic growth by providing capital for infrastructure development, technology transfer, and job creation.
- Stability: A deficit in the capital account can indicate that a country is open to foreign investments and is seen as a stable and attractive investment destination.
- Conclusion: In conclusion, a deficit in the capital account is considered better than a deficit in the current account as it can lead to economic growth and stability in the long run.
- Explanation:
- Current Account Deficit: A deficit in the current account signifies that a country is importing more goods and services than it is exporting. This can lead to a decrease in foreign exchange reserves and can indicate an imbalance in the economy.
- Capital Account Deficit: A deficit in the capital account means that a country is borrowing more capital from foreign sources than it is lending or investing abroad. This can be seen as a positive sign as it shows that the country is attracting foreign investments which can help in economic development.
- Importance of Capital Account:
- Economic Growth: Foreign investments can contribute to economic growth by providing capital for infrastructure development, technology transfer, and job creation.
- Stability: A deficit in the capital account can indicate that a country is open to foreign investments and is seen as a stable and attractive investment destination.
- Conclusion: In conclusion, a deficit in the capital account is considered better than a deficit in the current account as it can lead to economic growth and stability in the long run.
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At the state of equilibrium in balance of payments, there will be deficit in either of the accounts. Deficit in which account will be considered as better?a)Current accountb)Capital accountc)Both (a) and (b)d)Neither (a) nor (b)Correct answer is option 'B'. Can you explain this answer?
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At the state of equilibrium in balance of payments, there will be deficit in either of the accounts. Deficit in which account will be considered as better?a)Current accountb)Capital accountc)Both (a) and (b)d)Neither (a) nor (b)Correct answer is option 'B'. Can you explain this answer? for Class 12 2024 is part of Class 12 preparation. The Question and answers have been prepared according to the Class 12 exam syllabus. Information about At the state of equilibrium in balance of payments, there will be deficit in either of the accounts. Deficit in which account will be considered as better?a)Current accountb)Capital accountc)Both (a) and (b)d)Neither (a) nor (b)Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for Class 12 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for At the state of equilibrium in balance of payments, there will be deficit in either of the accounts. Deficit in which account will be considered as better?a)Current accountb)Capital accountc)Both (a) and (b)d)Neither (a) nor (b)Correct answer is option 'B'. Can you explain this answer?.
At the state of equilibrium in balance of payments, there will be deficit in either of the accounts. Deficit in which account will be considered as better?a)Current accountb)Capital accountc)Both (a) and (b)d)Neither (a) nor (b)Correct answer is option 'B'. Can you explain this answer? for Class 12 2024 is part of Class 12 preparation. The Question and answers have been prepared according to the Class 12 exam syllabus. Information about At the state of equilibrium in balance of payments, there will be deficit in either of the accounts. Deficit in which account will be considered as better?a)Current accountb)Capital accountc)Both (a) and (b)d)Neither (a) nor (b)Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for Class 12 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for At the state of equilibrium in balance of payments, there will be deficit in either of the accounts. Deficit in which account will be considered as better?a)Current accountb)Capital accountc)Both (a) and (b)d)Neither (a) nor (b)Correct answer is option 'B'. Can you explain this answer?.
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At the state of equilibrium in balance of payments, there will be deficit in either of the accounts. Deficit in which account will be considered as better?a)Current accountb)Capital accountc)Both (a) and (b)d)Neither (a) nor (b)Correct answer is option 'B'. Can you explain this answer?, a detailed solution for At the state of equilibrium in balance of payments, there will be deficit in either of the accounts. Deficit in which account will be considered as better?a)Current accountb)Capital accountc)Both (a) and (b)d)Neither (a) nor (b)Correct answer is option 'B'. Can you explain this answer? has been provided alongside types of At the state of equilibrium in balance of payments, there will be deficit in either of the accounts. Deficit in which account will be considered as better?a)Current accountb)Capital accountc)Both (a) and (b)d)Neither (a) nor (b)Correct answer is option 'B'. Can you explain this answer? theory, EduRev gives you an
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