Question : Which of the following statement is correct?
- Trade deficit is always a great cause of worry for an economy.
- Borrowings from abroad are recorded in the capital account of balance of payment on the debit side.
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)
21st Jan, 2024
Correct Answer:
Both are false
Solution :
Trade deficit is not a cause of worry as it reflects a rise in investment which will build the capital stock and increase the future output in the economy.
Borrowings from abroad are recorded in the capital account of balance of payment on the credit side.
Hence option B is correct .
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