ECONOMICS
BALANCE OF PAYMENTS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Visible balance inflow
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Visible balance outflow
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Invisible balance inflow
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Invisible balance outflow
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Detailed explanation-1: -Any transaction which brings in foreign exchange (currency) is recorded on credit side whereas any transaction that causes a country to lose its foreign exchange is recorded on debit side.
Detailed explanation-2: -Capital transactions include purchasing and selling assets (non-financial) like land and properties. The capital account also includes the flow of taxes, purchase and sale of fixed assets etc., by migrants moving out/into a different country.
Detailed explanation-3: -Invisible items of BOP account are those which are not seen crossing the borders. These are not recorded at ports. All types of services like services of shipping, banking, tourism, investment services and unilateral transfers are invisible items.
Detailed explanation-4: -Under the BoP standard presentation, invisibles form part of the current account and have three major heads: services, transfers and income. These three major heads are then disaggregated into minor heads (Annex 1).