CBSE Class 12-commerce Macroeconomics Balance Of Payments
Learn about balance of payment macroeconomics from the CBSE Class 12 Commerce Economics chapter Open Economy Macroeconomics by referring to our revision notes, sample papers, past year papers etc. at TopperLearning.
The balance of payments (BoP) record the transactions in goods, services and assets between residents of a country with the rest of the world. There are two main accounts in the BoP – the current account and the capital account. The current account records exports and imports in goods and services and transfer payments. Trade in services denoted as invisible trade (because they are not seen to cross national borders) includes both factor income (payment for inputs-investment income, that is, the interest, profits and dividends on our assets abroad minus the income foreigners earn on assets they own in India) and non-factor income (shipping, banking, insurance, tourism, software services etc.). Transfer payments are receipts which the residents of a country receive ‘for free’.
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