Question

explain the disequilibrium and measures of recertification​

Answer 1

Answer:

The main cause of the disequilibrium in the balance of payments arises from imbalance between exports and imports of goods and services. When for one reason or another exports of goods and services of a country are smaller than their imports, disequilibrium in the balance of payments is the likely result.

Disequilibrium of Deficit arises when our receipts from the foreigners fall below our payment to foreigners. It arises when the effective demand for foreign exchange of the country exceeds its supply at a given rate of exchange. This is called an 'unfavourable balance'.

Answer 2

The disequilibrium in Balance of payments can happen due to number of factors like

Imbalance in the import and export of the country

High expenditure on large Imports

political situation in the country

Social factors due to changes in behavior of the consumers

High growth of population

Explanation:

• The various reason for disequilibrium takes place due to surplus or deficit in the balance of payment of the country. These can be taken care of by encouraging more exports through liberalization of government policies. It would encourage more exports by the companies in the global markets
• The other measure that can be brought is by reducing the imports and minimizing inflation by checking on the prices of goods in the country. Rise in inflation does not help with export of goods, therefore it is necessary to keep inflation in control
• The government can also create a fixed exchange rate by  devaluation of the currency for initiating trading. The fall in the value of the currency would initiate the exporters to buy more goods since the the goods in the country becomes cheaper for the foreign companies

To know more about balance of payments

What is balance of payments? Explain the structure and components of balance of payments.

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Distinguish between Balance of payment and Balance of trade.Mention the different items that are included in a country's balance of payment.

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