Question

Which among he following situations can lead to deficit balance of payments for a country?

• A. More export than import
• B. More import than export
• C. Equal amount of imports and exports
• D. Only export to other countries

Answer 1

The correct option is B More import than export

Balance of payments is the record of international monetary transactions of countries. It records the information of exports and imports. When a country spends more for imports than what it earns from exports, it results in a deficit balance of payment.