Distinction between Balance on trade account and Balance on current account

Solution

Balance on trade account records the difference between value of exports and imports of material goods (visible items). Balance on current account records the difference between receipts and payments of foreign exchange on account of goods, services and unilateral transfers (visibles and invisibles). (ii) Clearly, BOT account is a part of balance on current account, and therefore, a narrow concept as compared to balance on current account which is a wider concept.

Some More Questions From Open Economy Macroeconomics Chapter

The value of a country’s import of goods is र 200 crores, and value of export is र 250 crores. Find out its BOT.

A country’s balance of trade is र (–) 60 crores and value of import of goods is र 100 crores. out value of export of goods.

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Open Economy Macroeconomics

Distinction between Balance on trade account and Balance on current account

Some More Questions From Open Economy Macroeconomics Chapter

The value of a country’s import of goods is र 200 crores, and value of export is र 250 crores. Find out its BOT.

A country’s balance of trade is र (–) 60 crores and value of import of goods is र 100 crores. out value of export of goods.

What is meant by balance of payment (BOP) account?
or
What does BOP account record?
or
Where are borrowings from abroad recorded and why

Balance of payment always balances. Comment.

When does a situation of deficit/surplus in BOP arise?
or
Explain meaning of deficit in BOP.

Distinguish between BOT and BOP.

Distinguish between current account and capital account of BOP account. Mention any two transactions (components) of each.

State any four items of current account of BOP account.