Question

True or False

1. When a country has a current account deficit, it means the country has accumulated foreign assets in a given period.

2. The trade balance is NOT the most important component of the BOP

Answer 1

1: true

Because we know that a current account deficit or lackness of the country’s trade deficit is, in which the price of the goods and services of the particular country's imports exceeds than the price of the products of the same country's exports. more over the current account consists of the net income and transfers.

2: false

As we know that he balance of payments is the sum amount of all transactions made between the one country with other country or other countries over a mentioned period of time for example quarterly or yearly.

Or we can say in other words BOP includes all money transactions or trade transactions that a country's industries, private sectors, laymans, companies and rest organs complete with laymans ,companies, private sectors and other bodies outside the country or other countries. All these transactions or money trsnsctions include of imports and exports.

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