ECONOMICS
BALANCE OF PAYMENTS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A a receipt of a gift of cash from abroad
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B a receipt of a subsidy from abroad
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C a receipt of interest of abroad
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D a receipt of funds for long-term investment from abroad
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Detailed explanation-1: -The financial account involves financial assets such as gold, currency, derivatives, special drawing rights, equities, and bonds. During a complex transaction containing capital assets and financial claims, a country may record part of a transaction in its capital account and the other part in its current account.
Detailed explanation-2: -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-3: -The balance of payments (BOP) transactions consist of imports and exports of goods, services, and capital, as well as transfer payments, such as foreign aid and remittances. A country’s balance of payments and its net international investment position together constitute its international accounts.
Detailed explanation-4: -Balance Of Payment (BOP) is a statement that records all the monetary transactions made between residents of a country and the rest of the world during any given period.