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Question : 2
Total: 52
Read the following statements - Assertion (A) and Reason (R). Choose one of the correct alternatives given below:
Assertion (A) : The Balance of Payments is in surplus, if autonomous receipts are greater than autonomous payments.
Reason (R) : Autonomous transactions are determined by the difference in the Balance of Payments.
Assertion (A) : The Balance of Payments is in surplus, if autonomous receipts are greater than autonomous payments.
Reason (R) : Autonomous transactions are determined by the difference in the Balance of Payments.
Solution:
Assertion (A) is true, but Reason (R) is false.
Explanation: When Autonomous Receipts (Both Current and Capital) exceeds Autonomous Payments (Both Current and Capital), it leads to Surplus in BOP. Accommodating transactions are determined by the difference in BOP. These are deliberately done by RBI after seeing the difference in BOP or whether BOP is in deficit or surplus.
Explanation: When Autonomous Receipts (Both Current and Capital) exceeds Autonomous Payments (Both Current and Capital), it leads to Surplus in BOP. Accommodating transactions are determined by the difference in BOP. These are deliberately done by RBI after seeing the difference in BOP or whether BOP is in deficit or surplus.
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