Assertion: Balance of payment account of a country always balance.
Reasoning: BOP shows the total assets and obligations over a time-period.
Answer & explanation
Correct answer: option 1
The correct answer is Option 1:Both Assertion (A) and reasoning (R) are correct and R is the correct explanation of A.
Balance of Payments (BOP) : It is a statistical statement summarising all the external transactions (receipts and payments) on current and capital account in which a country is involved over a period of time, say, a year. As the BOP shows the total assets and obligations over a time-period, it always balances.