Differentiate between autonomous and accommodating transactions.

Answer: The key differences between autonomous and accommodating transactions in international trade are: 1. Purpose: Autonomous transactions are carried out for commercial purposes to generate profit, while accommodating transactions are undertaken to balance or support the autonomous transactions, fulfilling financial needs rather than being profit-driven. 2. Market Forces vs. Policy Decisions: Autonomous transactions are determined by market forces and are influenced by factors such as supply, demand, price, and competition. They act independently of any monetary policy decisions. Accommodating transactions, on the contrary, are influenced by policy decisions and are implemented by governments and financial institutions to support the economy and maintain balance. 3. Types of Transactions: Autonomous transactions deal primarily with the exchange of goods and services, such as exports and imports, while accommodating transactions are more focused on financial assistance, like loans and grants to help balance the country's balance of payments.