ECONOMICS
BALANCE OF PAYMENTS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A definitely favourable, as Bolivia could increase its exports of gas and oil
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B definitely unfavourable, as the foreign companies would transfer profits out of the country
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C uncertain, as there would be inflows and outflows of currency
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D zero, as Bolivia itself would use the gas and oil produced
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Detailed explanation-1: -Quotas – Under the quota system, the government may fix and permit the maximum quantity or value of a commodity to be imported during a given period. By restricting imports through the quota system, the deficit is reduced and the balance of payments position is improved.
Detailed explanation-2: -Measures Taken by the Indian Government for Improving Balance of Payments: Full Convertibility of Rupee in the Current Account: In budget proposals of 1992-93, a new system named LERMS (Liberalised Exchange Rate Management System) was introduced and since March 1, 1992 double exchange rates system was adopted.
Detailed explanation-3: -The current account is used to mark the inflow and outflow of goods and services into a country. The capital account is where all international capital transfers are recorded.
Detailed explanation-4: -The IMF lends money to nurture the economies of member countries with balance of payments problems instead of lending to fund individual projects. This assistance can replenish international reserves, stabilize currencies, and strengthen conditions for economic growth.