ECONOMICS (CBSE/UGC NET)

ECONOMICS

BALANCE OF PAYMENTS

Please wait while the activity loads.
If this activity does not load, try refreshing your browser. Also, this page requires javascript. Please visit using a browser with javascript enabled.

If loading fails, click here to try again

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

A Chinese company sells $1 million worth of berets to the U.S. army. How is this recorded in the US BOP?

A	credit
B	debit
C	Either A or B
D	None of the above

Explanation:

Detailed explanation-1: -The balance of payments (BOP) is the method by which countries measure all of the international monetary transactions within a certain period. The BOP consists of three main accounts: the current account, the capital account, and the financial account.

Detailed explanation-2: -What Is the Formula for Balance of Payments? The formula for calculating the balance of payments is current account + capital account + financial account + balancing item = 0.

Detailed explanation-3: -Balance of payment surplus occurs when a country’s total exports are higher than its total imports. This surplus helps countries to fund their domestic productions and even allows them to lend it to other countries.

Detailed explanation-4: -Current account. Financial account. Capital account. Decision-making. Developing trade policies. Establishing fiscal objectives. Implementing growth strategies. Analyzing deficits.

There is 1 question to complete.