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Showing posts from October, 2024

Balance of Payment

  Meaning of Balance of Payments Balance of payments is an accounting statement that provide a systematic record to all the economic transaction , between resident of a country and the rest of the world , in a given period of time.   Economic Transaction 1.       Visible Items      These include all types of physical goods which are imported and exported as they are made of some matter that can be seen, touched, measured. 2.       Invisible Items           Invisible items of trade refers to all types of services like shipping , banking , etc…these are called invisible goods as they can not be felt , seen ,and measured 3.       Unilateral Items or transfer            Unilateral transfer include gifts, remittance,etc.. since these transaction donot involve any claims for repayments. 4.       ...

FOREIGN EXCHANGE

 FOREIGN EXCHANGE Foreign Exchange refers to the currencies of  other countries. FOREIGN EXCHANGE RATE •       It is the rate at which one currency is exchanged for the other. •       It is the price of one currency in terms of the other. •       For example, if one dollar can be exchanged for eighty four rupees, then the value of rupees is: $1 = Rs.84  Types of Foreign Exchange (i)                   FIXED EXCHANGE RATE (ii)                 FLEXIBLE EXCHANGE RATE (iii)               MANAGED FLOATING SYSTEM FIXED EXCHANGE RATE •       It is a system in which the exchan...