The Current Account records transactions related to trade in goods and services, income receipts and payments (like interest and dividends), and unilateral transfers (like remittances and grants). The Capital Account records transactions related to cross-border investments (FDI, FPI), loans, and changes in foreign exchange reserves. The BoP must balance, meaning the sum of the current account and the capital account must equal zero (with changes in reserves accounting for the balance).
Which among the following statements is correct ?
Asked in APPSC Group II Mains paper 2 2025 · Topic: Balance of Payments (BoP) (Definition and Significance of Balance of Payments (BoP))
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Answer: A. Balance of payments includes current account and capital account
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