ECONOMICS
BALANCE OF PAYMENTS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A debit on the UK balance of payments
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A credit on the UK balance of payments
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Either A or B
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None of the above
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Detailed explanation-1: -The Balance of Payments (BOP) is a summary of the economic transactions of a country with the rest of the world for a specific period. It serves as an accounting statement on the economic dealings between residents of the country and non-residents.
Detailed explanation-2: -The balance of payments summarises the economic transactions of an economy with the rest of the world. These transactions include exports and imports of goods, services and financial assets, along with transfer payments (like foreign aid).
Detailed explanation-3: -Current account of Balance of Payments account records only exports and imports of goods and services.
Detailed explanation-4: -The balance of payments tracks international transactions. When funds go into a country, a credit is added to the balance of payments (“BOP”). When funds leave a country, a deduction is made. For example, when a country exports 20 shiny red convertibles to another country, a credit is made in the balance of payments.