B.Com Ist Year Balance Of Trade & Balance Of Payment Short Question Answer

B.Com Ist Year Balance Of Trade & Balance Of Payment Short Question Answer :- hii friends this post is very useful for all the student B.com, In this post you will find Business Environment Topic Wise chapter wise all the content Question Answer Notes Model Paper Examination Paper Sample Practice Paper PDF Download Hindi & English For Free.

Short Answer Questions Notes

Q.1. Distinguish between balance of trade and balance of

payment.

Ans. See Page 41 and 42.

Q.2. How does adverse balance of trade affects an

economy?

Ans. See Page 40 and 41.

 Q.3. “Balance of payment always balances.” Explain this

statement.

Ans. See Page 42. India’.

Q.4. Discuss the main causes of disequilibrium in the

balance of payment.

Ans. See Page 43 and 44.

 Q.5. Suggest measures to correct the. unfavourable

balance of payment.

Ans. See Page 44 and 45

Q.6. Write a short note on ‘Import Substitution Policy in Ans. Meaning of Import Substitution: Import substitution              (Meerut, 2005)

Ans.Meaning of Import Substitution : Import substitution means to replace the imported commodity or commodities by indigenous production. In other words, it means to produce at home what we are importing from abroad , so that the imports of such commodities are done away with. To achieve the objective of self-reliance and to save the foreign exchange, import substitution os necessary for a country.

NEED FOR IMPORT SUBSTITUTION STUDY MATERIAL NOTES

 Like export promotion, import substitution is for us a dire necessity in the present context of the Indian economy.

(1) To Save Foreign Exchange : We are in a perilous situation so far as foreign exchange position is concerned. Therefore to save foreign exchange reserves of the country, import substitution is necessary.

(2) Devaluation of Money : India has devalued its rupees many times to correct disequilibrium in its balance of payment. Policy of import substitution can help to remove this problem.

(3) To Check the Disequilibrium in the Balance of Payment : Dis-equilibrium in the balance of payment is the direct result of high imports and low exports. To reduce the imports, it is necessary that imported commodities are replaced by the home products.

(4) To Attain Self-reliance: To attain self-reliance, policy of import substitution is a great value. We are still dependent in a big way for some commodities of crucial economic importance, e.g., petroleum, non ferrous metals, chemicals and allied products etc. on the foreign countries. All these we would like to produce ourselves.

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