Economics, Accounting & Business: Post your doubts here!

[Rashmit Arora]

i do understant the worsening of invisible balance but how will visible balance improve if the goods are meant for the african market??

If they're exporting the goods to Africa, the countrys visible exports will increase, therefore improving the position of the visible balance.

HOWEVER, I can't come up with a good enough justification regarding the worsening of the invisible balance. The invisible balance refers to the balance of trade in services. There is NO export nor import of services taking place. As someone stated incorrectly^ the outflow of income will lead to a worsening of the invisible balance. That isn't true because income will not be considered a part of the invisible balance! So i don't really get how the invisible balance is worsening.

 

[Mad Gal]

it's clear. Thanks again

you're welcome

 

[Mad Gal]

If they're exporting the goods to Africa, the countrys visible exports will increase, therefore improving the position of the visible balance.

HOWEVER, I can't come up with a good enough justification regarding the worsening of the invisible balance. The invisible balance refers to the balance of trade in services. There is NO export nor import of services taking place. As someone stated incorrectly^ the outflow of income will lead to a worsening of the invisible balance. That isn't true because income will not be considered a part of the invisible balance! So i don't really get how the invisible balance is worsening.

Invisible balance = services + Investment income + transfers.

 

[Rashmit Arora]

Invisible balance = services + Investment income + transfers.

ARE YOU SUUREE? cause the text book says its only the trade in services.

 

[Mad Gal]

http://www.xtremepapers.com/papers/... AS Level/Economics (9708)/9708_s11_qp_12.pdf
Que 1 - i dont understand Opt B. The ans is B, i chose C. Explain?
Que 21 - ans = c. Why wouldn't A be correct??

Please

 

[Mohammed Hassan]

cost of stock = 1200. Now that it is out of fashion it can be now sold for 800 (NRV) = 1200-400. (am not sure if this is right! If this is the answer, then i should be right )

Sale or return basis, this is when goods sold are not yet accepted by the consumers. As in there's no assurance that it has been sold sold. In such cases, you have to reduce sales and increase your stock level. If the debtor later on accepts the goods, you have to increase debtors, increase sales and reduce stocks.
Am not very thorough with sale or return basis too! Better post it as a separate que and ask for others help too

yeah, for the first part u r right! understood thnx but one, question, what value will u choose? the NRV? why?

yeah! i think u r right about that! thnnnnnnnx for everything

 

[Mad Gal]

ARE YOU SUUREE? cause the text book says its only the trade in services.

am like 80% sure. Someone else agreed that i was right.
Invisible TRADE balance i think would mean the difference between exp and imp of services. BUT, Invisible balance = all 3 components. Am kind of sure!

 

[Mad Gal]

yeah, for the first part u r right! understood thnx but one, question, what value will u choose? the NRV? why?

yeah! i think u r right about that! thnnnnnnnx for everything

The standard says cost or NRV, whichever is lower. SO in this case its 1200 vs 800. SO choose 800!

 

[shanky631]

ARE YOU SUUREE? cause the text book says its only the trade in services.

Basic categories of invisible trade include services (receipts and payments arising from activities such as customer service or shipping); income from foreign investment in the form of interest, profits, and dividends; private or government transfers of monies from one country to another; and intellectual property and patents.

 

[Rashmit Arora]

http://www.xtremepapers.com/papers/CIE/Cambridge International A and AS Level/Economics (9708)/9708_s11_qp_12.pdf
Que 1 - i dont understand Opt B. The ans is B, i chose C. Explain?
Que 21 - ans = c. Why wouldn't A be correct??

Please

Q1 - Capital is the only factor of production which requires other factor of productions to produce it. Capital is any man-made aid to production. A sewing machine for instance, is a capital good, which requires labour+land in order to produce it.

Q21- Whilst calculating the current account balance, you are required to balance the Current account, the Capital account and the Financial account. These three accounts do not usually cancel each other fully, and therefore another section of the BOP is brought into the picture, i.e. Net errors and omissions. This is a balancing item and is therefore a must when it comes to making the balance of payments. The option A is wrong because changes in the foreign currency reserves aren't taken into account when the BOP is being made.

 

[Mohammed Hassan]

Sale or return basis, can someone give me a proper explanation on how the double entry works.
=> when the customer hasn't informed anything bout the goods being accepted or not?
=> when the customer accepts?
And if there's any other situations. Pleeeeeeeaaaase! You'd do me so much of help

i didnt read that book, but i think it may help out, its page 366 from that pdf... check it out and tell me if it answered ur questions or not...

 

[shanky631]

http://www.xtremepapers.com/papers/CIE/Cambridge International A and AS Level/Economics (9708)/9708_s11_qp_12.pdf
Que 1 - i dont understand Opt B. The ans is B, i chose C. Explain?
Que 21 - ans = c. Why wouldn't A be correct??

Please

In Q21 C should be the answer because net errors and omissions is a component of BOP structure whereas foreign currency reserves aren't recorded in BOP. hope it helps.

 

[Mohammed Hassan]

The standard says cost or NRV, whichever is lower. SO in this case its 1200 vs 800. SO choose 800!

thnx sry if the question was a bit silly (A) xPP

 

[Mad Gal]

In Q21 C should be the answer because net errors and omissions is a component of BOP structure whereas foreign currency reserves aren't recorded in BOP. hope it helps.

thank you. I think foreign reserves are recorded buh its just a disclosure. wouldn't have any impact on the total!

 

[Mad Gal]

thnx sry if the question was a bit silly (A) xPP

No its not silly at all!

 

[parthrocks]

please help!!!

 

[shanky631]

The answer is A but what is the difference between option A and Option C. plz help

 

[parthrocks]

The answer for 2.jpg is C......gf.jpg is A but why not B...................reason???Anser for j.jpg that is question no 21 is C bt why not D as it will have the sam effect na,,,,,..........and the last question of jk.jpg is C....bt why not A...i mean how do u distingish comparative and absolute....when is when....plzzz reply asap!!!

please help!!!

 

[parthrocks]

I think

View attachment 9504

The answer is A but what is the difference between option A and Option C. plz help

I think that the formula for terms of trade talks about the index of export and import prices...Hence,,,its the prices not the value......the prices here means the total % increase or decrease......
if i m wrong plzzz let me know///

 

[shanky631]

plz someone solve this.