Which of the following statements is true about autonomous transactions?

BOP is said to be in surplus if autonomous receipts are greater than autonomous payments.

The correct answer is Option (1) → BOP is said to be in surplus if autonomous receipts are greater than autonomous payments.

International economic transactions are called autonomous when transactions are made due to some reason other than to bridge the gap in the balance of payments, that is, when they are independent of the state of BoP. One reason could be to earn profit. These items are called ‘above the line’ items in the BoP. The balance of payments is said to be in surplus (deficit) if autonomous receipts are greater (less) than autonomous payments.

• "These are also known as below the line items" – Incorrect, they are above the line items. Below the line items are accommodating transactions.

• "These only occur in capital account of BOP" – Incorrect, autonomous transactions occur in both current and capital accounts.

• "These items are done to correct the imbalance of BOP" – Incorrect, those are accommodating transactions, not autonomous.