Which among the following forms the part of Balance of Payments 1 Balance of Trade 2 Fore...........

Economic Affairs Foreign Investment

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Which among the following forms the part of Balance of Payments?

1. Balance of Trade

2. Foreign Direct Investments

3. Foreign Indirect Investments

4. Foreign Aid

5. Foreign Tourist Expenditures

6. Domestic Tourism Expenditures

Choose the correct option from the codes given below:

l, 2, 3, 4, 5 and 6

1, 2 and 5 only

2, 3, 4 and 5 only

1, 2, 3, 4 and 5 only

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Explanation:

A statement that summarizes an economy’s transactions with the rest of the world for a specified time period. The balance of payments, also known as balance of international payments, encompasses all transactions between a country’s residents and its nonresidents involving goods, services and income; financial claims on and liabilities to the rest of the world; and transfers such as gifts. The balance of payments classifies these transactions in two accounts – the current account and the capital account. The current account includes transactions in goods, services, investment income and current transfers, while the capital account mainly includes transactions in financial instruments. An economy’s balance of payments transactions and international investment position (IIP) together constitute its set of international accounts