Question

Q. With reference to the ‘Balance of Payments’ which of the following statements is/are correct?

Select the correct answer using the code given below:

• A. 1 only
• B. 1 and 2 only
• C. 2 and 3 only
• D. 1, 2 and 3

Answer 1

The correct option is C 2 and 3 only

Explanation:

Statement 1 is incorrect: The BoP account consists of a Current account, Capital account, and Financial Account. The BoP data is being compiled and published by RBI. A BOP statement of a country indicates whether the country has a surplus or a deficit of funds.

Statement 2 is correct: A closed economy that doesn’t carry out any trade with any other country or does not involve any int
eraction with another country has zero balance of payments.

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.