1. Choose the correct statement from given below. (a) Balance of trade records the exports and imports of invisible items. (b) A surplus in BoT can rectify the deficit in ВоР. (c) Accommodating items are only recorded in capital account of BoP. (d) Import of machinery will be recorded in capital account of BoP.
Answers
Answered by
1
Answer:
A surplus in BoT can rectify the deficit in ВоР
Explanation:
Answered by
1
Answer:
(c) Accommodating items are only recorded in capital account of BoP.
Explanation:
- In BOP, economists distinguish between autonomous and accommodating items. The primary distinction between the two is that, whereas deficits or surpluses in BOP occur as a result of autonomous items, accommodating items are used to maintain balance in the BOP account.
- Accommodating transactions are compensating capital transactions used to correct imbalances in autonomous items of the balance of payments. For example, if the BOP has a current account deficit, the deficit is covered by capital inflows from abroad.
- Because accommodating transactions are undertaken to balance the BoP, they are only recorded in the capital account of the BoP.
Hence, the correct option is (c).
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