Given below are some statements. Read them carefully and choose the correct statement (s) from the given options.

Statement 1: International economic transactions are called 'Accommodating' when transactions are made due to some reason other than to bridge the gap in the balance of payments.  

Statement 2: 'Accommodating' transactions are called ‘above the line’ items in the BoP.  

None of the given statement is correct.

The correct answer is Option 4: None of the given statement is correct.

Statement 1: International economic transactions are called 'Accommodating' when transactions are made due to some reason other than to bridge the gap in the balance of payments. This is false. International economic transactions are called autonomous (not accommodating) when transactions are made due to some reason other than to bridge the gap in the balance of payments  

Statement 2: 'Accommodating' transactions are called ‘above the line’ items in the BoP. This is false. 'Autonomous' transactions are called ‘above the line’ items in the BoP.  

"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. In other words, they are determined by the net consequences of the autonomous transactions. Since the official reserve transactions are made to bridge the gap in the BoP, they are seen as the accommodating item in the BoP (all others being autonomous)."