Scribd Logo
Upload

Welcome to Scribd!

  • 11 views

    Balance of Payment

    Uploaded by

    Taufiq Ahmad
    The balance of payments is a record of all financial transactions between a country and the rest of the world, including cash inflows and outflows. A balance of payments deficit occurs when cash outflows are greater than inflows. Countries can reduce deficits by decreasing aggregate demand through fiscal and monetary policy tightening to lower imports. They can also attract short-term capital inflows by offering higher interest rates to foreign investors.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content

    You might also like

    Balance of Payment

    Uploaded by

    Taufiq Ahmad
    11 views1 page
    The balance of payments is a record of all financial transactions between a country and the rest of the world, including cash inflows and outflows. A balance of payments deficit occurs when cash outflows are greater than inflows. Countries can reduce deficits by decreasing aggregate demand through fiscal and monetary policy tightening to lower imports. They can also attract short-term capital inflows by offering higher interest rates to foreign investors.

    Original Description:

    Copyright

    © Attribution Non-Commercial (BY-NC)

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    The balance of payments is a record of all financial transactions between a country and the rest of the world, including cash inflows and outflows. A balance of payments deficit occurs when cash outflows are greater than inflows. Countries can reduce deficits by decreasing aggregate demand through fiscal and monetary policy tightening to lower imports. They can also attract short-term capital inflows by offering higher interest rates to foreign investors.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
    11 views1 page

    Balance of Payment

    Uploaded by

    Taufiq Ahmad
    The balance of payments is a record of all financial transactions between a country and the rest of the world, including cash inflows and outflows. A balance of payments deficit occurs when cash outflows are greater than inflows. Countries can reduce deficits by decreasing aggregate demand through fiscal and monetary policy tightening to lower imports. They can also attract short-term capital inflows by offering higher interest rates to foreign investors.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
    of 1

    Balance of Payment Balance of payment (bop) is a statement which records all financial transactions between the countries with

    another country. The statement shows all cash inflows and all cash outflows.

    How to Reduce Balance of Payment Deficit? Balance of payment deficit is a situation when cash outflow greater than cash inflow in the country. There are a few of ways to reduce the deficit:1. Reduce aggregate demand This can be done by using contractionary fiscal and tight monetary policies. It will reduce disposable income and purchasing power. When tax increase, demand for import goods will decrease, when demand decrease, they will demand less import. As a result, it will reduce the amount of cash outflow.

    2. Obtain short-term capital inflow The government can offer higher interest rate, so that in short-term, foreign investors will grab this opportunity to invest in our company. This will ensure money inflow in one country in short-term time

    You might also like