ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Assertion: Export and Import of goods (visible items) and Export and Import of services (invisible items) will be recorded in the current account of BOP.

Detailed explanation-2: -Visible items of BOP account are those material goods which are seen crossing the border. These are actually recorded at ports. Examples of visible items are exports and imports of goods like machinery, rice, tea, cloth, etc.

Detailed explanation-3: -The visible trade balance (merchandise trade balance) is that part of the balance of trade figures that refers to international trade in physical goods, but not trade in services; it thus contrasts with the invisible balance. The balance is calculated as the value of visible exports less the value of visible imports.

Detailed explanation-4: -Balance of Trade : It refers to the total value of country’s export commodities and total value of imports commodities. Thus, balance of trade includes only visible trade, i.e., movement of goods (exports and imports of goods).

Detailed explanation-5: -Ans. The transactions involving export and import of goods, i.e. only the visible items of economic transactions, determine the Balance of Trade. Balance of Trade is in surplus, when the value of export of goods are more than the value of import of goods.