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Directions: In the following questions, a statement of assertion (A) is followed by a statement of reason (R). Mark the correct choice as:
Assertion (A): Import of machinery is reflected in the current account of balance of payments.
Reason (R): Export and import of goods and invisibles are recorded in the current account of balance of payments.
  • a)
    Both assertion (A) and reason (R) are true and reason (R) is the correct explanation of assertion (A).
  • b)
    Both assertion (A) and reason (R) are true but reason (R) is not the correct explanation of assertion (A).
  • c)
    Assertion (A) is true but reason (R) is false.
  • d)
    Assertion (A) is false but reason (R) is true.
Correct answer is option 'A'. Can you explain this answer?
Verified Answer
Directions: In the following questions, a statement of assertion (A) ...
Export and import of all goods including machines are recorded in the current account.
Note: There is a third category (besides current account and capital account) called official reserve account which records transactions of the central bank in a BOP statement. These transactions are called accommodating or ‘beloiv the line’ transactions. It relates to running down its reserves of foreign exchange by selling foreign currency in foreign exchange market in case of a deficit. The decrease (or increase) in official reserves is called the overall balance of payments deficit (or surplus).
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Most Upvoted Answer
Directions: In the following questions, a statement of assertion (A) ...
Assertion (A): Import of machinery is reflected in the current account of balance of payments.

Reason (R): Export and import of goods and invisibles are recorded in the current account of balance of payments.

Explanation:
The balance of payments (BoP) is a systematic record of all economic transactions between the residents of one country and the residents of another country over a specified period of time. It is divided into three main components: the current account, the capital account, and the financial account.

Current Account:
The current account of the balance of payments records the transactions involving the export and import of goods and services, as well as income flows and transfers. It is further divided into four sub-components: trade in goods, trade in services, income (such as wages, interest, and dividends), and current transfers.

Import of Machinery:
When a country imports machinery, it is considered as a transaction of goods and services. Machinery is a physical product that is being imported, and it falls under the category of trade in goods. Therefore, the import of machinery is reflected in the current account of the balance of payments.

Reasoning:
The reason provided states that export and import of goods and invisibles are recorded in the current account of the balance of payments. This statement is correct as the current account records all transactions related to goods and services. It includes the export and import of goods, which encompasses machinery as well. Therefore, the reason is valid and supports the assertion.

Conclusion:
Both the assertion and reason are true, and the reason correctly explains the assertion. Therefore, the correct answer is option 'A': Both assertion (A) and reason (R) are true and reason (R) is the correct explanation of assertion (A).
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Directions: In the following questions, a statement of assertion (A) is followed by a statement of reason (R). Mark the correct choice as:Assertion (A): Import of machinery is reflected in the current account of balance of payments.Reason (R): Export and import of goods and invisibles are recorded in the current account of balance of payments.a)Both assertion (A) and reason (R) are true and reason (R) is the correct explanation of assertion (A).b)Both assertion (A) and reason (R) are true but reason (R) is not the correct explanation of assertion (A).c)Assertion (A) is true but reason (R) is false.d)Assertion (A) is false but reason (R) is true.Correct answer is option 'A'. Can you explain this answer?
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Directions: In the following questions, a statement of assertion (A) is followed by a statement of reason (R). Mark the correct choice as:Assertion (A): Import of machinery is reflected in the current account of balance of payments.Reason (R): Export and import of goods and invisibles are recorded in the current account of balance of payments.a)Both assertion (A) and reason (R) are true and reason (R) is the correct explanation of assertion (A).b)Both assertion (A) and reason (R) are true but reason (R) is not the correct explanation of assertion (A).c)Assertion (A) is true but reason (R) is false.d)Assertion (A) is false but reason (R) is true.Correct answer is option 'A'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Directions: In the following questions, a statement of assertion (A) is followed by a statement of reason (R). Mark the correct choice as:Assertion (A): Import of machinery is reflected in the current account of balance of payments.Reason (R): Export and import of goods and invisibles are recorded in the current account of balance of payments.a)Both assertion (A) and reason (R) are true and reason (R) is the correct explanation of assertion (A).b)Both assertion (A) and reason (R) are true but reason (R) is not the correct explanation of assertion (A).c)Assertion (A) is true but reason (R) is false.d)Assertion (A) is false but reason (R) is true.Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Directions: In the following questions, a statement of assertion (A) is followed by a statement of reason (R). Mark the correct choice as:Assertion (A): Import of machinery is reflected in the current account of balance of payments.Reason (R): Export and import of goods and invisibles are recorded in the current account of balance of payments.a)Both assertion (A) and reason (R) are true and reason (R) is the correct explanation of assertion (A).b)Both assertion (A) and reason (R) are true but reason (R) is not the correct explanation of assertion (A).c)Assertion (A) is true but reason (R) is false.d)Assertion (A) is false but reason (R) is true.Correct answer is option 'A'. Can you explain this answer?.
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