CBSE 2021 Class 12 Economics Term 1 Paper

Question : 37

Total: 60

Identify the incorrect statement with reference to Balance of Payments.
(Choose the correct alternative)

Current account records Exports and Imports transactions of a nation.
Export of machinery is recorded in capital account.
Transfer of funds to the relatives abroad, entered on debit side of current account.
Current account records all such transactions, which do not impact asset or liability status of a country.

Solution:

(b) Export of machinery is recorded in capital account.
Explanation: Export of machinery cannot be recorded in capital account of BOP because export and import of visible items including machinery are recorded in current account.

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