Question

Differentiate between autonomous and accommodating Balance of Payments

transactions.​

Answer 1

Answer

Autonomous transaction Accommodating transaction

Autonomous transaction refer

to those international economic transactions that ate undertaken with the

sole motive of earning profit. Accommodating transactionefer

to those international economic transactions that are to correct the disequilibrium in the autonomus item.

They are also called 'above the line items' in BOP They are also called' below the

line items in BOP.

They are independent of the BOP status of a country. They 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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