Question

Which of the following statement is / are true?
(i) Balance of payments is a record of supply of and demand for a country's currency.
(ii) Flow of interest and dividend payments is recorded in the capital account section of the BOP
(iii) As per PPP, the rate of change of the exchange rate is equal to the difference between inflation rates

• A. Statements (i) and (ii) are true
• B. Statements (ii) and (iii) are true
• C. Statements (i) and (iii) are true
• D. Statements (i) alone is true

Answer 1

The correct option is C Statements (i) and (iii) are true

Only statement (i) and (iii) are true. Flow of interest and dividends payments is recorded in the current account section of the BOP (Balance of Payment).