Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: Open Economy Macro Economics

Question:

Unilateral transfers are "one-way" transaction. These includes donations, gifts, remittances etc. In which side of the BoP account will the receipt of gifts and donations be recorded?

Options:

Credit side

Debit side

It will not be recorded

Depends on what gift and donations have been received

Correct Answer:

Credit side

Explanation:

Anything which increases the inflow of the foreign currency into the country is recorded in the Credit side of the Balance of Payment account, be it bilateral or unilateral transaction.