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What does the Balance of Payments Account record? Distinguish between the ''balance on current account'' and the ''balance of trade'' in this account. |
| Answer» Solution :The balance of payments (BOP), ALSO known as balance of INTERNATIONAL payments, summarizes all TRANSACTIONS that a COUNTRY's individuals, companies and government bodies complete with individuals, companies and government bodies outside the country.Balance on current ACCOUNT and balance on capital account are interrelated. A deficit in the current account must be settled by a surplus on the capital account. A surplus in the current account must be matched by a deficit on the capital account. | |