A debit balance of payments occurs due to (i) Low imports and high exports (ii) High imports and low…
Only statement (ii) is correct. A debit (deficit or adverse) balance of payments occurs when a country's total foreign exchange payments exceed its foreign exchange…
Choose your answer
A debit balance of payments occurs due to
(i) Low imports and high exports
(ii) High imports and low exports.
Answer and explanation
Correct answer D
Only statement (ii) is correct. A debit (deficit or adverse) balance of payments occurs when a country's total foreign exchange payments exceed its foreign exchange receipts, which is primarily driven by high imports coupled with low exports.
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UGC NET Commerce