ECONOMICS
BALANCE OF PAYMENTS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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True
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False
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Either A or B
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None of the above
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Detailed explanation-1: -Unilateral transactions: Unilateral transfers include gifts, donations, personal remittances, and other ‘one-way’ transactions. These refer to those receipts and payments, which take place without any service in return.
Detailed explanation-2: -The current account includes transactions in goods, services, investment income, and current transfers. The capital account, broadly defined, includes transactions in financial instruments and central bank reserves.
Detailed explanation-3: -The correct answer is option c, future accounts. The balance of payment does not include the predictable future account.
Detailed explanation-4: -The exchange of services between countries is not considered. The current account of the balance of payment comprises exports and imports of goods, services and unilateral transfers like remittances, gifts, donations, etc.