| Assertion [A] Balance of Payments is the accounting record of economic transactions only. |
| Reason [R] Surplus balance of payments is an indicator of excess of outflows over inflows of foreign trade. |
A) Both Assertion [A] and Reason [R] are correct and Reason [R] is the correct explanation of Assertion (A)
B) Both Assertion [A] and Reason [R] are correct, but Reason [R] is not the correct explanation of Assertion (A)
C) Assertion [A] is correct, but Reason [R] is incorrect
D) Both Assertion and Reason [R] are incorrect
Correct Answer: D
Solution :
Balance of payments includes all transactions between home country and rest of the world while more of outflow in BoP indicates deficit in BoP.
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