The balance of payments of a country is a systematic record of
A
all import and export transactions of a country during a given period of time, normally a year
B
goods exported from a country during a year
C
economic transaction between the government of one country to another
D
capital movements from one country to another
Correct Answer: Option A
Explanation
1. The Balance of Payments (BoP) of a country is a systematic record of all economic transactions between the residents of that country and the residents of the rest of the world over a given period of time, normally a year.
2. These economic transactions include trade in goods (visible trade), trade in services (invisible trade), income flows (like profits, interest, dividends), unilateral transfers (like gifts, remittances), and capital movements (investments, loans).
3. Option (A) describes it as a record of all import and export transactions. While BoP encompasses more than just import and export of goods, in a broad sense, this option captures the essence of recording all transactions with the rest of the world over a period. It is the most comprehensive definition among the choices.
4. Option (B) is incorrect as it only mentions goods exported.
5. Option (C) is incorrect as it limits transactions to those between governments only.
6. Option (D) is incorrect as it only covers capital movements, which is just one component of the BoP (the capital account).