ECONOMICS
BALANCE OF PAYMENTS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Current Account
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Capital Account
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Errors and Omission Section
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Balance of Trade Section
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Detailed explanation-1: -The capital account, on a national level, represents the balance of payments for a country. The capital account keeps track of the net change in a nation’s assets and liabilities during a year.
Detailed explanation-2: -The capital account measures the capital transfers between U.S. residents and foreign residents. The financial account reflects increases or decreases in a country’s ownership of international assets.
Detailed explanation-3: -Capital account is the account of a natural person, i.e. an account of person who is alive. Hence, it can be classified as a personal account.
Detailed explanation-4: -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-5: -Balance of payments (BOP) These transactions are made by individuals, firms, and the Government. Hence, the BOP is the record of a country’s exports, imports, foreign direct investments (FDI), remittances, etc. The two main components of the Balance of payments are current account and capital account.