ECONOMICS (CBSE/UGC NET)

ECONOMICS

BALANCE OF TRADE

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

Each month, Ima Newhere, who recently arrived in the United States, sends half her paycheck to her sister in Poland. How does this affect the U.S. balance of payments?

A	credit
B	debit
C	Either A or B
D	None of the above

Explanation:

Detailed explanation-1: -The importance of the balance of payment in India can be determined from the following points: It monitors the transaction of all the imports and exports of services and goods for a given period. It helps the government analyse a particular industry’s export growth potential and formulate policies to sustain it.

Detailed explanation-2: -Importance of the Balance of Payments It helps to monitor the import-export transactions in a given period. It analyses the export growth potential of a country. It helps the government make sustainable fiscal and trade policies and strategies.

Detailed explanation-3: -Statement 3 is correct: The Balance of Payments (BoP) includes both the current account and capital account, in the capital account there is the nation’s imports and exports of capital and foreign aid.

Detailed explanation-4: -Conclusion. Balance of payments is an important concept in the economics of a country and various components make up the balance of payments. The balance of payments cannot be zero as a deficit in the current account will be offset by a surplus in the capital account and vice versa.

There is 1 question to complete.