11 Economybasics Foreigntrade
Qts 1 Explain meaning of Balance of payment
The balance of payments (BOP) is the method by which countries measure all of the international monetary transactions within a certain period
Qts 2 Explain meaning of Balance of trade (BOT)
Balance of trade (BOT) is the difference between the value of a country's imports and exports for a given period
Qts 3 Explain meaning of current account in Balance of trade
Current account in Balance of trade is the country’s trade balance, or the balance of imports and exports of goods and services, plus earnings on foreign investments minus payments to foreign investors.
Qts 4 Explain meaning of the capital account,
Capital account, also known as the capital and financial account, records the net flow of investment into an economy. These transactions consist transfer payments such as foreign aid and remittances.
Qts 5 Explain meaning of Foreign direct investment (FDI) is an investment from a party in one country into a business or corporation in another country
Foreign direct investment (FDI) is an investment from a party in one country into a business or corporation in another country
Qts 6 Explain meaning of foreign institutional investor (FII)
Foreign institutional investor (FII) is an investor or investment fund investing in a country outside of the one in which it is registered or headquartered
These FII usually include hedge funds, mutual funds, insurance companies and investment banks among others.
Qts 7 Explain meaning of Foreign Exchange Reserves?
Foreign Exchange Reserves are assets held by a country's central bank in foreign currencies, gold, and other reserve assets. They serve as a financial buffer, ensuring economic stability and the ability to meet international obligations.
Qts 8 Explain reason for maintaining Foreign Exchange Reserves?
Countries hold reserves to ensure economic stability, manage and stabilize their currency, facilitate international trade, maintain investor confidence, and meet external debt obligations.
Qts 7 Explain constitutes of foreign exchange reserves?
The majority of these reserves are typically held in foreign currency assets, which can include major global currencies like the US Dollar, Euro, and Japanese Yen in the form of treasury bills, bonds, and other financial instruments.
Qts 8 Explain impact of gold reserves in Foreign Exchange Reserves?
Gold, due to its intrinsic value and universal acceptance, serves as a stable and traditional component of foreign exchange reserves, acting as a hedge against economic uncertainties.
Qts 9 Explain Special Drawing Rights (SDRs)?
SDRs are international reserve assets created by the International Monetary Fund (IMF) to supplement member countries' official reserves, aiding them in managing exchange rate risks.
Qts 10 Explain Impact of Foreign Exchange on country's economy?
Adequate reserves can bolster a country's economic standing, reinforce investor confidence, stabilise its currency, and allow it to manage economic downturns more effectively.
Qts 11 Explain meaning of Special Economic Zones (SEZs)
Special Economic Zones (SEZs) are growth engines that can boost manufacturing, augment exports and generate employment. The Government has introduced the scheme of SEZs in order to provide a hassle free operational regime and encompassing state of the art infrastructure and support services
Qts 12 Explain meaning of Ease of Doing Business (EoDB) index
Ease of Doing Business (EoDB) index is a ranking system established by the World Bank Group. In the EODB index, 'higher rankings' (a lower numerical value) indicate better, usually simpler, regulations for businesses and stronger protections of property rights.
Qts 13 Explain meaning of Single Window System
Single Window System is one-stop portal investors, which will help entrepreneurs secure various clearances without going to department physically.