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Qaagi - Book of Why

Causes

Effects

This leads to increase in expenditure on both current and capital accounts in BOPthereby creatinga BOP deficit

the current account deficitscreateBOP deficits

high levels of imports(passive) caused byBOP deficits

possibly worsening the current account positionleadingto a BOP deficit

The fall in export revenue ... the current account deficitcontributesto the BOP deficit

Capital outflowscausea BOP deficit

either a worsening of the current account or capital account , or both(passive) can be caused byA BOP deficit

The demand for dollars will risesharply causinga BoP deficit

the global economic decline and high crude oil prices(passive) is caused byThe BoP deficit

1:52:25 AM Low FDI levelshave ledto BoP deficit

Any attempt to increase the money stock ( from LM0 to LM1 ) temporarily raises income and importscausinga BOP deficit

that , over the last six years , China ’s net errors and omissions have moved in just one directionalways contributingto the BOP deficit

The throw on effect is an increase in expenditure on both current and capital accounts in BoPthereby creatinga BOP deficit

Expansionary fiscal policy ( by increasing Y and Malso leadsto a BOP deficit

the problemcausethe BOP deficit

Supervision of NRI accountsto preventBOP deficit

factorscausingBOP deficit

a deficit in either the CA or KA(passive) can be caused byA BOP deficit

The sharp widening of the merchandise goods ' trade deficitcreateda BoP deficit

market pressure for dollar depreciating and pound appreciating from official exchange ratecreatesmarket pressure for dollar depreciating and pound appreciating from official exchange rate

from global crisis Supplemented by external borrowing ( AfDB & World Bankresultingfrom global crisis Supplemented by external borrowing ( AfDB & World Bank

to Reduced Foreign Investments Forex reserves Depletion External Borrowings Debt Trapleadsto Reduced Foreign Investments Forex reserves Depletion External Borrowings Debt Trap

to more restrictive fiscal or monetary policies , currency controls , export incentives , and import obstacles 11 - 24 Inflation and the International CompanyCould leadto more restrictive fiscal or monetary policies , currency controls , export incentives , and import obstacles 11 - 24 Inflation and the International Company

to a severe depletion of gold reservesleadingto a severe depletion of gold reserves

to devaluation of currencyleadsto devaluation of currency

exchange rates to rise and shift both the BP and the IS schedules to the rightcausingexchange rates to rise and shift both the BP and the IS schedules to the right

depression on home currencycausesdepression on home currency

currency weakeningcausescurrency weakening

depreciation FIGURE 8causingdepreciation FIGURE 8

problemscauseproblems

the 10causingthe 10

to currency devaluation , financial instability ... raise in interest rates , reduction in investment and GDPwill leadto currency devaluation , financial instability ... raise in interest rates , reduction in investment and GDP

to the loss of credibility and the collapse of the Bretton Woods systemledto the loss of credibility and the collapse of the Bretton Woods system

alsowould ... causealso

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