Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: Open Economy Macro Economics

Question:

What does economic transactions in Balance of Trade consist of?

Options:

Visible items only

Invisible items only

Both Visible and Invisible Items

Capital Transfers

Correct Answer:

Visible items only

Explanation:

Balance of Trade (BOT) is the difference between the value of exports and value of imports of goods of a country in a given period of time. Export of goods is entered as a credit item in BOT, whereas import of goods is entered as a debit item in BOT. It is also known as Trade Balance. Thus BOT includes only visible items.