Question

Balance of Payments of an economy records_____________ for a fiscal year.
a) income and expenditure of the government
b) inflow and outflow of funds of the government
c) inflow and outflow of foreign exchange to/from the economy
d) inflow and outflow of loans to/from the rest of the world​

Answer 1

Answer:

Income and expenditure of the government.

Explanation:

• In international economics, a country's balance of payments is the difference between all money flowing into the country during a given time period and all money flowing out to the rest of the world.
• It records all of the country's economic transactions in goods, services, and assets with the rest of the world over a specified time period, usually a year. In simple terms, it is the country's systematic accounting balance sheet, which includes both debit and credit transactions.
• The BOP encompasses all transactions that occur between entities in one country and the rest of the world over a period of time. The current account, capital account, and financial account are the three main components of the BOP.

Thus the correct answer is Option A.

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Answer 2

Answer:

Balance of Payments of an economy records inflow and outflow of foreign exchange to/from the economy for a fiscal year.

Explanation:

• A statement of all transactions between entities in one country and the rest of the world over a specified time period, such as a quarter or a year, is known as the balance of payments (BOP), sometimes known as the balance of international payments.
• An economy's balance of payments keeps track of its capital transfers, unrequited transfers, and exports and imports of goods and services.
• Thus, foreign exchange is acquired and disbursed through transactions involving them.
• Thus, inflow and outflow of foreign exchange to/from the economy takes place in balance of payment.

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