Define Balance of Payments. Discuss briefly the components of current

1.	Define Balance of Payments. Discuss briefly the components of current account.
Answer» Balance of payments is defined as the statement of accounts of a country’s inflows and outflows of foreign exchange in a fiscal year. Components of Current Account are as under : 1. Visibles refer to the merchandise/goods exported from or imported by a country. Exports which results inflows for the country are placed on the credit side whereas imports are placed on the debit side as they result into outflow of foreign exchange from the country. 2. Invisibles refer to the different types of services and transfers that take place between nations. They give rise to monetary receipts and payments for the nation.

Define Balance of Payments. Discuss briefly the components of current account.

Answer»

Balance of payments is defined as the statement of accounts of a country’s inflows and outflows of foreign exchange in a fiscal year.

Components of Current Account are as under :

1. Visibles refer to the merchandise/goods exported from or imported by a country. Exports which results inflows for the country are placed on the credit side whereas imports are placed on the debit side as they result into outflow of foreign exchange from the country.

2. Invisibles refer to the different types of services and transfers that take place between nations. They give rise to monetary receipts and payments for the nation.

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