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
The balance of payments (BoP) is a comprehensive record of all economic transactions between a country and the rest of the world during a specific period. It includes not only goods (exports and imports) but also services, income flows, and capital movements. Option (a) correctly defines BoP as a systematic record of all import and export transactions, though technically it encompasses more than just merchandise trade. Option (b) is incomplete as it only mentions exports. Option (c) and (d) are too narrow, covering only specific components of BoP. The BoP is the broadest measure of international economic transactions. > Remember: BoP = Current Account (trade in goods/services) + Capital Account (investment flows). Answer: (a).
Question details
Year
2014
Paper
GS Paper 1
Question
Q41
Subject
Economy
Sub-topic
External Sector and Balance of Payments
Type
Factual single
Difficulty
Easy
Nature
Static
Source hint
NCERT Economics - Macroeconomics
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