In this article we will discuss about the ways for measuring deficit or surplus in balance of payments. It is only when all items in the balance of payments are included that there is no possibility of a deficit or surplus. But if some items are excluded from a country’s balance of payments and then […]
Measuring Deficit or Surplus in Balance of Payments
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Disequilibrium in Balance of Payments: Causes and Implications
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In this article we will discuss about the causes and implications of disequilibrium in balance of payments. Causes of Disequilibrium: There are many factors that may lead to a BOP deficit or surplus: 1. Temporary Changes (or Disequilibrium): There may be a temporary disequilibrium caused by random variations in trade, seasonal fluctuations, the effects of […]
Top 7 Measures to Correct Deficit Balance of Payments
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The following points highlight the top seven measures to correct deficit balance of payments. The measures are: 1. Adjustment through Exchange Depreciation 2. Devaluation or Expenditure-Switching Policy 3. Direct Controls 4. Adjustment through Capital Movements 5. Adjustment through Income Changes 6. Stimulation of Exports and Import Substitutes 7. Expenditure-Reducing Policies. Measure # 1. Adjustment through […]