Economic Awareness - Sectors of Indian Economy
Which of the following statements is TRUE regarding Balance of Trade?
Which of the following statements is TRUE regarding Balance of Trade?
medium Q15 of 15
Step-by-Step Solution
Step 1: Understand the relationship between BOT and BOP
Balance of Trade is a part of the broader Balance of Payments, which includes current and capital accounts.Step 2: Evaluate options
It is a component of the Balance of Payments correctly states this relationship. It includes both visible and invisible trade is wrong as BOT excludes invisible trade. It measures the net capital inflow of a country relates to capital account, and It accounts for only services trade is incorrect as BOT excludes services.Final Answer:
It is a component of the Balance of Payments → Option BQuick Check:
It is a component of the Balance of Payments ✅
Quick Trick: Remember BOT is a subset of BOP.
Common Mistakes:
MISTAKES- Confusing BOT with capital flows or services trade.
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