(a)OR(b)

Elaborate any two components of the Capital Account under the Balance of Payments Account.

The two components of the Capital Account under the Balance of Payments Account are:

Autonomous transactions are those international economic transactions which are independent of the state of Balance of Payments (BoP). These transactions are generally undertaken with an ‘economic motive’. Such transactions are called ‘above the line’ items in the BoP account.

Whereas;

Accommodating transactions are those international economic transactions which are undertaken (by competent authorities) to cover the surplus or deficit in Balance of Payments (BoP). These transactions are independent of any economic motive. Such transactions are called ‘below the line’ items in the BoP account.