Question : Which of the following statement is correct?
- Deficit in balance of trade indicates deficit in balance of payments also.
- Foreign investment are recorded in the capital account of balance of payment.
Option 1: Both are true
Option 2: Both are false
Option 3: Statement 1 is true and statement 2 is false.
Option 4: Statement 2 is true and statement 1 is false.
Answer (1)
25th Jan, 2024
Correct Answer:
Statement 2 is true and statement 1 is false.
Solution :
Deficit in balance of trade indicates deficit in balance of payments also is false as balance of trade is just a part of balance of payment. It doesn’t tell about the nature of BOP.
Foreign investment are recorded in the capital account of balance of payment.
Hence option D is correct .
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