Assertion:- Economic transactions of Indians investing in assets (foreign direct investment or portfolio investment) abroad is recorded under debit side of capital account in balance of payments account. Reason:- Balance of payments is the difference between inflow of foreign exchange and outflow of foreign exchange on account of economic transactions. An outflow of foreign exchange is entered as a negative (debit) item in BOP and inflow as a positive (credit) item in BOP account. *
(i) Both assertion and reason are true and reason is the correct explanation of assertion.
(ii) Both assertion and reason are true and reason is not the correct explanation of assertion.
(iii) Assertion is true but reason is false. (iv) Assertion is false but reason is true.
Answers
Answer:
1 one is the correct answer
(i) Both assertion and reason are true and reason is the correct explanation of assertion.
Balance of Payments (BoP) data are a systematic summary of an economy's economic interactions with the rest of the world during a given time period. The Reserve Bank of India (RBI) is in charge of compiling and disseminating BoP information. The BoP Manual of the International Monetary Fund contains rules that are largely congruent with BoP.
Current account, capital account, mistakes and omissions, and changes in foreign exchange reserves make up the balance of payment (BoP). Transactions are divided into goods (exports and imports) and invisibles in the BoP's current account. Invisible transactions are further divided into three categories.