ECONOMICS
BALANCE OF PAYMENTS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Difference between visible items of exports and imports
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Difference between invisible items of exports and imports
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Difference between external and internal flow of gold
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Difference between all receipts of foreign exchange and payment of foreign exchange
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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: -The market balance of payments refers to the balance of supply and demand for a country’s currency in the foreign-exchange market at a given rate of exchange. If the exchange rate is fixed, the market balance of payments would be in balance only by chance.
Detailed explanation-3: -Balance of payments is the statement of a country’s trade with other nations. The relationship between balance of payments and exchange rates under a floating-rate exchange system will be driven by the supply and demand for the country’s currency and all transactions taking place with other countries.
Detailed explanation-4: -The components of the balance of payments are the current record/account, the capital record/account, and the financial record/account.