Surplus in BOp arises when:
A(autonomous payments >autonomic receipt 🧾
B autonomous receipt 🧾>autonomous payment
C accommodating receipt 🧾>autonomous payments
D None of these
Ans – B)
The surplus in BoP arises when autonomous receipts are greater than autonomous payments.
Autonomous transactions are those transactions that do not depend on other BoP transactions and are undertaken with a profit motive.
For example:- If an Indian wants to import goods from China at a cheap rate and sell those goods in India for higher profits.
However, it results in an outflow of foreign exchange and can lead to a BoP deficit. But this Indian is only thinking for his personal profit.
In another example, if an Indian wants to export food grain without thinking it may lead to scarcity of the same in the domestic market. This transaction is also driven by a profit motive.
Such transactions are autonomous transactions and lead to surplus and deficit of Balance of payments.
- No categories