Distinguish between autonomous transactions and accommodating transactions in
the Balance of Payments of the economy.
Solution and Explanation
- Autonomous Transactions:
These are transactions that occur due to economic conditions or external factors and do not require any adjustment in the Balance of Payments. They are also known as independent transactions. Examples include exports, imports, foreign investment, and loans.
- Accommodating Transactions:
These transactions occur as a result of adjustments to maintain the Balance of Payments equilibrium. They include borrowing from foreign countries or drawing down reserves. They are required to balance the inflows and outflows from autonomous transactions.
Top CBSE CLASS XII Economics Questions
___________ farming is a system that is helpful in restoring, maintaining and enhancing the ecological balance.
(Choose the correct alternative to fill in the blank):The present day rapid industrial growth in China can be traced back to the economic reforms introduced in 1978, where ________ .
(Choose the correct alternative to fill in the blank):
(i) Initially reforms were initiated in agriculture, foreign trade and investment sectors.
(ii) The policy of dual pricing was adopted.
(iii) The Government revoked the policy of Special Economic Zones.Read the following statements: Assertion (A) and Reason (R). Choose the correct alternative from those given below:
Assertion (A): In the recent past, Indian economy has been facing the problem of jobless growth.
Reason (R): Jobless growth refers to a situation where an economy is able to produce more goods and services without generating additional employment.Read the following statements carefully:
Statement 1: India, Pakistan, and China have similar physical endowments but totally different political systems.
Statement 2: Both India and Pakistan laid great emphasis on creating a large private sector.Read the following statements carefully:
Statement 1: India, Pakistan and China have similar physical endowments, but totally different political systems.
Statement 2: Both India and Pakistan laid great emphasis on creating a large private sector.
Top CBSE CLASS XII Balance of payments (BOP) Questions
- According to the Reserve Bank of India’s (RBI’s) Statistical Supplement released on 19th May, 2023:
“India’s foreign exchange reserves grew for the third straight week and reached near an approximate level of $600 billion.”
The above situation will ----- the ----- side of Balance of Payments account of India.
(Choose the correct alternative to fill in the blanks) - Identify the correct pair of statements given in Column I with the related terms in Column II:
- Read the following statements: Assertion (A) and Reason (R). Choose the correct alternative from those given below: Assertion (A): In case of an unfavourable Balance of Trade, the Current Account of the nation may be in surplus. Reason (R): Net invisible receipts of a nation can exceed the Net visible receipts. (Choose the correct alternative)
- Discuss any two factors which directly affect the demand for foreign exchange of a nation.
- Read the following text carefully:
Balance of Payments (BoP) systematically summarises the economic transactions of an economy with the rest of the world, over a given period of time. The BoP can be broadly divided into two accounts namely:- Current account
- Capital account
- Non-factor services such as travel, transportation, insurance etc.
- Transfer which do not involve any value in exchange.
- Income which includes compensation of employees and investment income.
- Non-debt flows such as direct and portfolio investments.
- Debt flows such as external assistance, commercial borrowings, non-resident deposits etc.
- (a) Define Balance of Payments.
- (b) Differentiate between the two accounts of Balance of Payments.
- (c) Give the meaning of Balance of Payments deficit with formula.
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