Assertion (A) : The ‘Balance of Payments’ presents a classified record of all receipts on account of…
According to the IMF Balance of Payments Manual, the Balance of Payments (BoP) is a systematic accounting record of all economic transactions between the residents of a…
Choose your answer
Assertion (A) : The ‘Balance of Payments’ presents a classified record of all receipts on account of goods exported, services rendered and capital received by ‘residents’ and payments made by them on account of goods imported and services received from capital transferred to ‘non-residents’ or ‘foreigners”.
Reason (R) : The ‘Balance of Payments’ of a country is a systematic record of all economic transactions between the ‘residents’ of a country and the rest of the world.
Answer and explanation
Correct answer A
According to the IMF Balance of Payments Manual, the Balance of Payments (BoP) is a systematic accounting record of all economic transactions between the residents of a reporting country and non-residents (the rest of the world) during a given period (Reason R). Because it systematically records resident-to-non-resident transactions, it presents a classified record of all current and capital receipts and payments on account of goods, services, and capital transfers (Assertion A). Thus, 'Both (A) and (R) are correct and (R) is the right explanation of (A)'.
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UGC NET Commerce