Macro

Balance of Payments

Easy

A country's balance of payment account is in surplus when?

Reserve Change = 0

Overall balance < 0

Reserve Change > 0

Reserve Change < 0

✅ Correct Option: 4

A Balance of Payments surplus means autonomous receipts exceed autonomous payments. The surplus is absorbed by an increase in the country's official foreign exchange reserves.

Under the BoP accounting convention, an increase in reserves is shown with a negative sign. Therefore, Reserve Change < 0. Hence, Option 4 is correct as per NCERT's convention and NTA's official key.

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What does capital account of BOP record?

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A theory of international exchange which holds that, the price of similar goods in different countries is the same, this theory is known as the:

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Owing to the current political instability across many countries, the Indian rupee has sharply lost its value in terms of US dollars. The impact of this would be :

(A) A rise in imports from USA

(B) A fall in imports from USA

(D) A fall in exports to USA

Choose the correct answer from the options given below :

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A country's balance of payment account is in surplus when?

Solution

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