Balance of Payments dynamics: Causes and Corrective Measures

Causes of disequilibrium in Balance of Payments, Steps to improve Balance of Payments position over the long term

What you’ll learn

• What is meant by Balanced, Surplus and Deficit Balance of Payments?
• What are the various causes of disequilibrium in Balance of Payments?
• What steps can be taken by a country to improve its balance of payments position over the long term?
• What is meant by Autonomous Transactions in Balance of Payments?
• What is the role of Accommodating Transactions in Balance of Payments?

Requirements

• Basic understanding of economic principles such as supply and demand, inflation and interest rates

Description

1. What is the meaning of Balance of Payments?
2. What are the various components of balance of payments?
3. What are the three situations in respect of Balance of Payments?
4. What is meant by balance in Balance of Payments?
5. What is the meaning of Surplus Balance of Payments?
6. What is meant by Deficit Balance of Payments?
7. What is meant by disequilibrium in balance of payments?
8. What are the various causes of disequilibrium in balance of payments?
9. How capital flight results in disequilibrium in balance of payments?
10. Speedy economic development can also cause disequilibrium in balance of payments. Discuss.
11. How net outflow of unilateral transfers can unbalance the balance of payments of a country?
12. Natural factors such as floods may cause disequilibrium in balance of payments. How?
13. How demonstration effect may result into disequilibrium in balance of payments?
14. What steps can be taken by a country to improve its balance of payments position over the long term?
15. Enhancing exports and reducing imports can improve the balance of payments position. Explain.
16. Which are the long term structural reforms which can improve the balance of payments position of the country over the long term?
17. What is meant by Autonomous transactions and what are its examples?
18. Define and explain the role of accommodating transactions in balance of payments.

Who this course is for:

• Students and any individual who enjoys learning about various concepts of economics