[Solved] Which of the following best defines the Balance of Payments (BoP)? — Ans: Record of all economic transactions between residents and non-residents | Economic Awareness

Economic Awareness - Sectors of Indian Economy

Which of the following best defines the Balance of Payments (BoP)?

AForeign exchange reserves held by the central bank

BTotal exports of goods and services in a year

CGovernment budget deficit

DRecord of all economic transactions between residents and non-residents

Step-by-Step Solution

Step 1: Understand Balance of Payments
BoP is a comprehensive record of all economic transactions between a country's residents and the rest of the world during a period.
Step 2: Analyze options
Only the record of all transactions between residents and non-residents correctly defines BoP. Exports, budget deficit, and forex reserves are parts but not the full definition.
Final Answer:
Record of all economic transactions between residents and non-residents → Option D
Quick Check:
Balance of Payments = all cross-border transactions ✅

Quick Trick: BoP = current + capital + financial accounts.

Common Mistakes:

MISTAKES

Master "Sectors of Indian Economy" in Economic Awareness

Start learning the concept with an interactive lesson.

More Economic Awareness Quizzes

Which of the following best defines the Balance of Payments (BoP)?