question_answer

                               Distinguish                                                                   

(i) between autonomous and accommodating transactions of Balance of Payments account and

(ii) between current account and capital account.

Answer:

(i) Difference between autonomous items and accommodating items of BoP are:                   

Basis	Autonomous Items	Accommodating Items
Meaning	These items are related to those transactions which are determined by consideration of profit.	These items are not related to those transactions which are determinded by consideration of profit.
Establish Bop identity	These items are not meant to establish Bop identity.	These items are meant to establish Bop identity.
Also called as	Above the line items.	Below the line items.

            (ii) Difference between current and capital account of Bop are:

Basis	Current Account of Bop	Capital Account of Bop
Nature of transacation	These are the transactions which do not effect the assets or liabilities position of the country.	These are the transactions which affects assets or liabilities position of the country.
Concept	It is flow concept.	It is a stock concept.
Formula/Component	Current Account=Exports and imports Visible and Invisible Items+Unilateral Transactions+Income Received?Income Paid to Abroad.	Capital Account=Borrowings and Lending from and to Abroad+investment to and from Abroad+Change in the Reserve of Foreign Exchange.