Balance of payments definition
Question
The balance of payments of a country is a systematic record of (a) all import and export transactions of a country during a given period of time, normally a year (b) goods exported from a country during a year (c) economic transaction between the government of one country to another (d) capital movements from one country to another
Options
all import and export transactions of a country during a given period of time, normally a year
goods exported from a country during a year
economic transaction between the government of one country to another
capital movements from one country to another
Explanation
Balance of payments (BoP) is a comprehensive record of all economic transactions between a country and the rest of the world during a specified period, typically one year. It includes not just goods but also services, income flows, and capital movements. Option (a) is the most accurate definition as it encompasses all import and export transactions. Option (b) is incomplete as it only mentions exports. Option (c) is incorrect as BoP includes both government and private transactions. Option (d) is too narrow as BoP includes current account transactions as well. > BoP = Current Account (trade, services, income) + Capital Account (investment, loans) + financial account.
Question details
Year
2013
Paper
GS Paper 1
Question
Q41
Subject
Economy
Sub-topic
International economics and balance of payments
Type
Factual single
Difficulty
Easy
Nature
Static
Source hint
NCERT Economics - International Trade
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