ECONOMICS
BALANCE OF PAYMENTS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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International movement of goods and services
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International movement of capital
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Foreign exchange market
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International movement of investments
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Detailed explanation-1: -The current account balance of payments is a record of a country’s international transactions with the rest of the world. The current account includes all the transactions (other than those in financial items) that involve economic values and occur between resident and non-resident entities.
Detailed explanation-2: -The Current Account is the difference between a nation’s total exports of goods, services, and transfers, versus its total imports. Transactions in financial assets and liabilities are excluded.
Detailed explanation-3: -Since a country’s balance on current account is the difference between exports and imports, it reflects the totality of domestic residents’ transactions with foreigners in the markets for current goods and services.
Detailed explanation-4: -The Current account records all transactions involving goods, services, investment income, and current transfer payments. The Capital account shows the net change in ownership of foreign assets and transactions in financial instruments.