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Open Economy Macroeconomics

Question
CBSEENEC12012927
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Why are autonomous items called 'above the line' items?

Solution
Because they are recorded in BOP account as first items before calculating deficit and surplus. In fact, deficit or surplus occurs due to autonomous items.

Some More Questions From Open Economy Macroeconomics Chapter

A country’s balance of trade is र (–) 60 crores and value of import of goods is र 100 crores. out value of export of goods. 

What is meant by balance of payment (BOP) account?
or
What does BOP account record?
or
Where are borrowings from abroad recorded and why
 

Balance of payment always balances. Comment.

When does a situation of deficit/surplus in BOP arise?
or
Explain meaning of deficit in BOP.

Distinguish between BOT and BOP. 

Distinguish between current account and capital account of BOP account. Mention any two transactions (components) of each.

State any four items of current account of BOP account.

Distinction between Balance on trade account and Balance on current account

What does a deficit in current account of BOP indicate?

State any four components (items) of capital account of BOP account.

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