ECONOMICS
BALANCE OF PAYMENTS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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price elastic demand for imports
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full employment
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price inelastic demand for exports
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high interest rates
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Detailed explanation-1: -The balance of payments summarises the economic transactions of an economy with the rest of the world. These transactions include exports and imports of goods, services and financial assets, along with transfer payments (like foreign aid).
Detailed explanation-2: -The current account is an important indicator of an economy’s speed. It is defined as the sum of the balance of trade (goods and services exports minus imports), net income from abroad, and net current transfers.
Detailed explanation-3: -The current account of the balance of payments includes a country’s key activity, such as capital markets and services. The current account balance should theoretically be zero, which is impossible, so in reality, it will tell whether a country is in a surplus or deficit.
Detailed explanation-4: -The estimated import demand elasticities are defined as. the percentage change in the quantity of an imported good. when the price of this good increases by 1%, holding prices. of all other goods, productivity, and endowments of the. economy constant.