6 Questions
What does the balance of payments measure?
The economic transactions between residents of a country and the rest of the world
Which component of the balance of payments represents trade in goods and services?
Current account
What does a surplus in the capital account of the balance of payments indicate?
More capital is flowing into the country than out of it
Which of the following is not a method to calculate national income?
Saving method
In national income accounting, which of the following is not included in the calculation of national income?
Personal savings
Which of the following is a component of national income but not a component of gross domestic product (GDP)?
Net foreign factor income
Study Notes
Balance of Payments
- The balance of payments measures a country's international transactions, including exports and imports of goods and services, income, and financial claims.
Components of Balance of Payments
- The current account represents trade in goods and services.
Capital Account
- A surplus in the capital account indicates that the country is receiving more foreign investment than it is making abroad.
National Income Accounting
- The following methods are used to calculate national income: Income Approach, Expenditure Approach, and Value Added Approach.
- One method not used to calculate national income is the Balance of Payments Approach.
Gross Domestic Product (GDP)
- National income excludes transfer payments, such as social security benefits and welfare payments.
- One component of national income not included in GDP is net income from abroad.
Test your knowledge of balance of payments with this quiz designed for class 12th economics students. Explore questions about what the balance of payments measures, components representing trade in goods and services, and the significance of a surplus in the capital account. Sharpen your understanding of this fundamental economic concept.
Make Your Own Quizzes and Flashcards
Convert your notes into interactive study material.
Get started for free
