If autonomous receipts are less than autonomous payments, the balance of payments of an economy will be _____________.
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → In deficit
The balance of payments is in deficit when autonomous receipts are less than autonomous payments. If the receipts were greater, it would be in surplus; if the two were equal, it would be in balance.
Autonomous transactions are dealings made for their own sake, for example trade or investment to earn a profit. They are not made to fill a gap in the balance of payments.
When autonomous payments are larger, the gap must be covered. The central bank sells foreign exchange from its reserves to do this. This fall in official reserves is the balance of payments deficit.
Note: A same/similar question was asked in CUET (UG) in the papers below.
| 2026 | 2025 | 2024 | 2023 | 2022 |
| – | – | – | 11-06 S3* 22-06 S3 | – |
* A similar question.
NCERT (2026-27): “Autonomous and Accommodating Transactions 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. Accommodating transactions (termed ‘below the line’ items), on the other hand, are determined by the gap in the balance of payments, that is, whether there is a deficit or surplus in the balance of payments.…” |