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BOP BOTVS
BOP accounts are all accounting
transactions between a country &
& the rest of the world.
It includes:
1. Export-Import (visible &
invisible items)
2. Financial Capital
3. Capital TransfersFeatures of BOP:
1. Systematic Record
2. Includes Visible & invisible items
& Economic Transactions
3. For a certain Period of time -
Generally annually
4. Recorded by double entry
BOT refers to difference between import
& Export.
It :includes
Debit –imports, foreign aid, domestic
spending abroad and domestic
investments abroad
Credit- exports, foreign spending in the
domestic economy and foreign
investments in the domestic economy.
Features of BOP:
1. EXPORT grater than IMPORT=
Favorable BOT
2. EXPORT less than IMPORT/
IMPORT greater than EXPORT=
Unfavorable BOT
3. Only visible items(not banking
BOP BOTVS
Component of BOP-
1. Current account for import &
Export, profit, dividend,
interest.
2. Capital account- for
receipt, payment, capital
transaction, reserve, gold
reserve etc.
Component of BOT-
1. Current account for import &
Export, profit, dividend,
interest.
BOP BOTVS
Correction Method for the BOP-
Monetary Measures:
1. Deflation
2. Exchange Depreciation
3. Devaluation of currency
4. Increase in direct and indirect tax
5. Exchange control
Non-Monetary Measures:
1. Export Promotion
2. Import substitution
3. Quotas
4. Tariffs
Correction method of BOT-
1. Cost of Production
2. Cost & Availability of Raw
Materials.
3. Non-tariff barriers on health,
environment, safety standards

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BOP vs-BOT

  • 1. BOP BOTVS BOP accounts are all accounting transactions between a country & & the rest of the world. It includes: 1. Export-Import (visible & invisible items) 2. Financial Capital 3. Capital TransfersFeatures of BOP: 1. Systematic Record 2. Includes Visible & invisible items & Economic Transactions 3. For a certain Period of time - Generally annually 4. Recorded by double entry BOT refers to difference between import & Export. It :includes Debit –imports, foreign aid, domestic spending abroad and domestic investments abroad Credit- exports, foreign spending in the domestic economy and foreign investments in the domestic economy. Features of BOP: 1. EXPORT grater than IMPORT= Favorable BOT 2. EXPORT less than IMPORT/ IMPORT greater than EXPORT= Unfavorable BOT 3. Only visible items(not banking
  • 2. BOP BOTVS Component of BOP- 1. Current account for import & Export, profit, dividend, interest. 2. Capital account- for receipt, payment, capital transaction, reserve, gold reserve etc. Component of BOT- 1. Current account for import & Export, profit, dividend, interest.
  • 3. BOP BOTVS Correction Method for the BOP- Monetary Measures: 1. Deflation 2. Exchange Depreciation 3. Devaluation of currency 4. Increase in direct and indirect tax 5. Exchange control Non-Monetary Measures: 1. Export Promotion 2. Import substitution 3. Quotas 4. Tariffs Correction method of BOT- 1. Cost of Production 2. Cost & Availability of Raw Materials. 3. Non-tariff barriers on health, environment, safety standards