ECONOMICS
BALANCE OF PAYMENTS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Are determined by motive of profit
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For welfare purpose
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For foreign investment
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None of these
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Detailed explanation-1: -Autonomous Items also known as ‘above the line items’ – are those international transactions which happen due to profit earning motive. All profit oriented international transactions – like export and import are autonomous transactions.
Detailed explanation-2: -(a) Autonomous items in BOP: These refer to international economic transactions that take place due to some economic motives like earning income and profit maximisation. They have nothing to do with foreign exchange payments.
Detailed explanation-3: -Autonomous transactions are independent of the state of BOP Account. For example, if a foreign company is making investments in India with the aim of earning profit, then such a transaction is independent of the country’s BOP situation.
Detailed explanation-4: -Autonomous transaction refer. to those international economic transactions that ate undertaken with the. the sole motive of earning profit. Accommodating transaction for. to those international economic transactions that are to correct the disequilibrium in the autonomous item.
Detailed explanation-5: -Autonomous transactions are those which are not influenced by other transactions in Balance of Payment Account. Accommodating transactions are those which are undertaken to cover Deficit /Surplus in BOP.