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Tag Archives | BOP

How to Analyse the Internal and External Balances? | BOP | Economics

For analysing the internal and external balances through the synthesis between monetary and fiscal policies, the IS (Investment-Saving) function, the LM (Liquidity preference – Money supply) function and the BOP function (B) are to be derived as below: Derivation of IS Function: The investment-saving function (IS) in an open system is determined on the assumption […]

Internal and External Balances of a Country | Economics

In this article we will discuss about the internal and external balances of a country. A balance or equilibrium means a situation in which transactions tend to repeat themselves indefinitely, since there is-no force calling for increase or decrease in any variable. The internal equilibrium or balance refers to such values of the economic variables […]

How to Correct the Balance of Payments? | Foreign Trade | Economics

In this article we will discuss about how to correct the balance of payments. Domestic Price Changes and Balance of Payments Adjustment: In the analysis concerning the changes in exchange rates, we took an over-simplified assumption that the home prices of depreciating country’s exports and foreign prices of her imports do not undergo changes as […]

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