Question

"Balance of payment always balances" explain the statement(5 marks question)
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Answer 1

Answer:

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Explanation:

Thus, in accounting sense, balance of payment always balances, In operating sense also BOP is always in equilibrium because if current account is in deficit, the same is restored (compensated) with capital account. Hence overall balance of payment is always balanced.

Answer 2

Answer:The balance of trade of a country may not balance. ... Only if the value of exports is equal to the value of imports, the balance of trade is said to be in equilibrium. But the balance of payments always balances because every transaction must be settled. Hence total debits must be equal to the total credits.

Explanation: because