Asked by Manpreet Aulakh on May 18, 2024
Verified
Statement I: Our balance of trade is part of our current account balance.
Statement II: Our balance of payments is part of our balance of trade.
A) Statement I is true and statement II is false.
B) Statement II is true and statement I is false.
C) Both statements are true.
D) Both statements are false.
Balance Of Trade
The difference in value between a country's imports and exports over a period of time.
Balance Of Payments
A financial statement summarizing a country's transactions with the rest of the world, including exports, imports, and capital flows, over a specified period.
- Acquire knowledge of the constituents and value of balance of payments records.
Verified Answer
GG
Geetha GanesanMay 19, 2024
Final Answer :
A
Explanation :
Statement I is true because balance of trade is a component of the current account balance, which also includes services, income, and transfers.
Statement II is false because the balance of payments includes both the current account balance (which includes balance of trade) and the capital account balance. Therefore, the balance of trade is only a part of the balance of payments, not the other way around.
Statement II is false because the balance of payments includes both the current account balance (which includes balance of trade) and the capital account balance. Therefore, the balance of trade is only a part of the balance of payments, not the other way around.
Learning Objectives
- Acquire knowledge of the constituents and value of balance of payments records.