Question

ASSERTION (A): A country always tries to balances the BOP i.e., balance in current account equals to balance in capital account. REASON (R): Balance Bop indicates stable economic relation with rest of the world. *

1 point

Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion

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

Assertion (A) is true but Reason (R) is false

Assertion (A) is false but Reason (R) is true​

Answer 1

Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion

Explanation:

• A country always tries to attain BOP so that stability can be achieved.
• If BOP is not maintained, then the economic stability will not be achieved and taxes etc will have to be imposed. The prices of things will go high in order to maintain the stability.
• Hence, BOP should be balanced to reach economic stability.