Question : Which of the following is an example of an invisible item in the Balance of Payments?
Option 1: Import of machinery
Option 2: Export of services
Option 3: Foreign investment in domestic real estate
Option 4: Repayment of foreign debt
Answer (1)
15th Jan, 2024
Correct Answer: Export of services
Solution : The correct answer is (b) Export of services
An invisible item in the Balance of Payments refers to transactions that involve the exchange of services, income, or transfers between residents of a country and non-residents. Examples of invisible items include exports and imports of services, such as tourism, transportation, consulting, and financial services. These transactions do not involve the physical movement of goods across borders.
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