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Open Economy Macroeconomics
Question
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Define (i) Accommodating and (ii) autonomous items.

Answer

(i) Accommodating items refer to transactions that occur because of other activity in the BOP like government financing. Such transactions are accommodating transactions because they accommodate the requirements of BOP accounts.
(ii) Autonomous items in BOP accounts refer to international economic transactions that take place due to economic motives like profit maximisation. These are called autonomous items because they are independent of balance of payment considerations.

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Some More Questions From Open Economy Macroeconomics Chapter

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