Question

Read the following statements - Assertion (A) and Reason(R), choose the correct answer the following:
Assertion (A): Balance of Trade (BOT) is the difference between the value of a country's exports and the value of a country's imports for a given period.

Reason (R): Balance of Payments records all transactions of capital nature.

[0.80 marks]

• A. Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
• B. Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).
• C. Assertion (A) is true but Reason (R) is false.
• D. Assertion (A) is false but Reason (R) is true

Answer 1

The correct option is B Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).

The difference between the amounts of exports and imports is referred to as the Balance of Trade. It includes only visible items. The accounting statement that provides systematic records of all economic transactions between residents of a country and the rest of the world is referred to as the Balance of Payments.