ECONOMICS
BALANCE OF PAYMENTS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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credit-inflow of foreign exchange to the country
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debit-outflow of foreign exchange to the country
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B O P must balance
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B O P can be unbalance
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Detailed explanation-1: -The BoP consists of three main components-current account, capital account, and financial account. As mentioned earlier, the BoP should be zero. The current account must balance with the combined capital and financial accounts.
Detailed explanation-2: -Elements of a Balance of Payment. There are three components of the balance of payment viz current account, capital account, and financial account. The total of the current account must balance with the total of capital and financial accounts in ideal situations.
Detailed explanation-3: -Balance of payments = balance of the current account + balance of the capital account + balance of the financial account.
Detailed explanation-4: -Current account. Financial account. Capital account. Decision-making. Developing trade policies. Establishing fiscal objectives. Implementing growth strategies. Analyzing deficits.