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Question : 10
Total: 19
Distinguish between 'autonomous' and 'accommodating' Balance of Payments transactions.
Solution:
| Autonomous Transactions | Accommodating Transactions |
|---|---|
| Autonomous transactions refer to those international economic transactions that are undertaken with the sole motive of earning profit. | Accommodating transactions refer to those international economic transactions that are undertaken to correct the disequilibrium in the autonomous items. |
| Autonomous transactions are classified 'above the line items' in BOP. | Accommodating items are classified 'below the line items' in BOP. |
| Such transactions are independent of the BOP status of a country. | Such transactions depend on the BOP status of a country as they are compensating short-term capital transactions that are undertaken to correct the disequilibrium in the autonomous items. |
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