ECONOMICS
BALANCE OF TRADE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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credit capital
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debit capital
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credit current
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debit current
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Detailed explanation-1: -A balance of payments deficit means the country imports more goods, services, and capital than it exports. It must borrow from other countries to pay for its imports. In the long-term, the country becomes a net consumer, not a producer, of the world’s economic output.
Detailed explanation-2: -Germany-Balance of payments, financial account was EUR57466. 00 Million in December of 2022, according to the EUROSTAT.
Detailed explanation-3: -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-4: -It is often positively correlated with the standard of living, alternative measures to GDP for that purpose. From the formula it is evident that balance of payments forms a part and chunk of our GDP and when it increases the GDP and growth rate increases and vice versa is also true.