Balance of Payment

Assertion: 'Make in India' programme will have a favorable effect on the balance of payments position of India. Reason: 'Make in India' will increase supply (inflow) of foreign exchange in India causing improvement in the balance of payments position.

• Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)

• Both Assertion (A) and Reason (R) are true but Reason (R) is the not correct explanation of Assertion (A)

• Assertion (A) is true but Reason (R) is false

• Assertion (A) is false but Reason (R) is true

The balance of payments (BOP) is an accounting system that records a country’s international transactions for a particular time period. It consists of ???

• Current account

• Financial/Capital Account

• a scale that is always balanced

Credit or Debit? Current Account or Financial Account?

The Lorax, an American, purchases a Japanese made Toyota Prius.

• Credit

• Debit

• Current Account

• Financial Account

Credit or Debit? Current Account or Financial Account?

Boeing sells a new 787 to Emirates Air.

• Credit

• Debit

• Current Account

• Financial Account

Credit or Debit? Current Account or Financial Account?

An ARAMCO employee working in Saudi Arabia sends most of his paycheck home to his wife in Houston.

• Credit

• Debit

• Current Account

• Financial Account

Credit or Debit? Current Account or Financial Account?

Americans donate $25 million in Tsunami relief to Thai relief organizations.

• Credit

• Debit

• Current Account

• Financial Account

Match the following Current Account Terms

• Net Transfers

• Foreign Factor income - Foreign factor payments

• Balance of Trade

• Transfers in - Transfers Out

• Net Foreign Factor Income

• Net Exports, Exports - Imports

Credit or Debit? Current Account or Financial Account? 2. A buyer for Macy’s purchases $1 million dollars worth lamb’s wool sweaters from a New Zealand textile firm.

• Credit

• Debit

• Current Account

• Financial Account

This account records a nation's imports and exports of goods, services, net investment income, and net transfers.

• current account

• financial/capital account

• official reserves

This account records flows of money from the purchase and sale of real estate and financial assets between countries.

• current account

• financial/capital account

• official reserves