12th Class Economics Solved Paper - Economics 2015 Delhi Set-I

  • question_answer
    Where will sale of machinery to abroad be recorded in the Balance of Payments Accounts? Give reasons.

    Answer:

    Sale of machinery to abroad (exports) will be recorded as positive item in the current account of BOP, The current account of BOP is that account which maintains the records of imports and exports of goods and services as well as record of unilateral transfers. Those transactions that result in an inflow of foreign exchange in the country are recorded as positive items in the current account of BOP. On the other hand, those items that lead to an outflow of foreign exchange from the country are recorded as negative items in the current account of BOP. Therefore, as sale of machinery abroad leads to an inflow of foreign exchange in the country it will be recorded as a positive item in the current account of BOP.


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