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What is the difference between favourable and unfavourable balance of payment?
when import of a country decrease and export increase it is known as favourable balance of of payment and vice versa
Why is it important for a country to balance its exports and imports?
it is important for a country to balance its exports & imports because if a country imports more than it exports it has to borrow from a international organizations like the World Bank ,and will then have to repay the loan with high interest. this means it will have less to spend on services such as schools ,hospitals ,law and order ,roads , etc
When a country has a favorable balances of trade?
Balance of trade, or net exports as it is sometimes called, is the difference between the monetary value of exports and imports of an economy over a certain period of time. In other words, it denotes the relationship between a country's imports and exports. This may be positive or negative.A positive trade balance is known as a trade surplus and this happens when exports are more than imports. On the other hand, a negative trade balance is called as a trade deficit or a trade gap and results when the imports are more than . The balance of trade is sometimes divided into a goods and a services balance.A country attains favourable balance of trade, when its value of exports produced by that country and purchased by a foreign country is more than its imports. This is because it results in a net inflow of monetary payments into the country from the foreign sector. It is called favourable becasue it is beneficial to a country.M.J. SUBRAMANYAM, MUMBAI
What is the difference between the balance of trade and the balance of payments?
the balance of trade is how much you receive the balance of payment is how much you pay
What are the majors of correcting an adverse balance of payment?
Answered by Shaaban B. Omar (Dar es Salaam, Tanzania) Balance of payment refers to the difference between the receipts (earnings) of a country from abroad and the payments of a country to abroad. It is the systematic record of a country's transactions with the rest of the world. Balance of payments can be favourable unfavourable, or balanced. Balance of payment is favourable if the country's receipts from abroad are greater than the country's payments to abroad. It is unfavourable if the country's payments abroad are greater than the country's receipts from abroad. It is balanced fi the country's receipts from abroad are equal to the country's payments abroad. Transaction records are recorded in various accounts, such as (a) Goods and services account: which deals with a systematic record of payments to foreigners in a specific period of time. (b) Unilateral transfer: which records such things as grants and gifts. (c) Long-term capital account: which records inward and outward flow of capital. (d) Short-term capital account: which deals with financial flows to finance trade, exchange rate and interest rate. (e) Unrecorded transactions: which deals with recording of omitted transactions, i.e. transactions which have never been captured in other accounts. (f) Official reserve transaction balance account: which deals with the final balance. This may be positive or negative. The balance of payment may be in disequilibrium. This is when the recordings indicate that there is a deficit. This shows that there has been unfavourable balance of payment because the total payments abroad have exceeded the total receipts from abroad. Deficit in the balance of payment may have been caused by a number of factors, such as: · Low export: due to low demand elasticity for exports and decline of the supply of goods for export. · Increase in demands for imports: due to low production of essential goods in the domestic economy. · Unfavourable terms of trade: due to the fall in price of exports and the rise of price of exports, which leads to low amount of receipts from abroad and the high amount of payments abroad. · Shortage of capital goods: the capital goods then have to be imported at whatever price. · Devaluation policy: which happens when the country's export have low price elasticity and when the imports have inelastic demand or when other countries which export similar products also devalue their currencies. · Unfavourable climatic condition: which leads to fall in the country's production, which leads to low export. Correction of a deficit in the balance of payments. When there is a deficit, a country has to adopt various methods to correct it. The methods that can be applied include: (a) Export promotion: One of the best way to promote export is to provide subsidies to exporters and applying tax exemption and trade fairs. These can encourage and empower the exporters, and with more production and export the disequilibrium can be reduced or corrected altogether. (b) Reducing expenditure on imports: This can be done by imposing high import tarrifs, thus importation of goods will be reduced thus domestic goods will have to be more production of domestic goods, the outflow of the government funds will be reduced. (c) Devaluation policy: The reduction of currency is made in order to promote exports and discourage imports, as when a currency is devalued exports become cheaper while imports become more expensive. (d) Increasing production: In this, the production of export goods is increased hand in hand with the increase of the production of goods which would otherwise be imported. (e) International cooperation: International organizations such as IMF, the World Bank and the World Trade Organization, can help to correct the balance of payment through aids, grants and loans. Financial assistance from donor countries: Friendly nations can assist fiancially a country with deficit in balance if payment.
What is the difference between favourable and unfavourable balance of payment?
when import of a country decrease and export increase it is known as favourable balance of of payment and vice versa
What difference between a favorable variance and an unfavorable variance?
Favourable variance is that variance which is good for business while unfavourable variance is bad for business
What is the process of analyzing the differences between the bank statement balance and the checkbook balance is?
The process is bank reconciliation.
What is direct labor variance?
It means the difference between the budgeted or estimated direct labour cost at the start of work activity with the actual direct labour cost at the end of activity or fiscal year. If budgeted cost is more then the actuall then it is favourable variance otherwise it is unfavourable direct labour cost variance
What are the differences between errors disclosed by trial balance and errors not disclosed by trial balance?
Kuch nai barbaad hai ye site
Causes of differences between of the cashbook balance and the bank statement balance?
1.deposit in transit 2.outstanding cheque 3.memoranda
What are the main differences between a balance sheet of a commercial bank and an ordinary business operation?
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Differences between visa card and master card?
The difference between Visa Card and Master Card is the issuing bank. Other differences include interest rates and balance transfer rates.
Why is it important for a country to balance its exports and imports?
it is important for a country to balance its exports & imports because if a country imports more than it exports it has to borrow from a international organizations like the World Bank ,and will then have to repay the loan with high interest. this means it will have less to spend on services such as schools ,hospitals ,law and order ,roads , etc
What are the reasons for differences between bank statement balance and cash book and passbook balance?
This is due to certain errors in the entries. That is the bank and cash books. Some of these errors are addition. When there is unpresented cheques and uncredited cheques.
What are the differences between a monocycle and a unicycle?
A monocycle has one wheel and is powered by an engine, while a unicycle also has one wheel but is powered by the rider's balance and pedaling.
Differences between 1950s and now?
differences between now and then 1905s
