ECONOMICS
BALANCE OF PAYMENTS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Visible items
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Invisible items
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Transfer payments
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Investments into the country
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Detailed explanation-1: -Current transfers are current account transactions in which a resident entity in one nation provides a non-resident entity with an economic value, such as a real resource or financial item, without receiving something of economic value in exchange.
Detailed explanation-2: -Current account of Balance of Payments account records only exports and imports of goods and services.
Detailed explanation-3: -The current account represents a country’s imports and exports of goods and services, payments made to foreign investors, and transfers such as foreign aid.
Detailed explanation-4: -There are three components to the current account – the ‘trade balance’, ‘primary income balance’ and ‘secondary income balance’. In economic analysis or commentary, most attention is usually given to the trade balance, which records the difference between the value of our exports and imports of goods and services.