Question

Assertion (A): Import of machinery is reflected in the current account of the balance of payments.

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

Options

• Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion (A).

• Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the Assertion (A).

• Assertion (A) is true, but Reason (R) is false.

• Assertion (A) is false, but Reason (R) is true.

Answer 1

Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion (A).

Explanation:

A country's current account balance of payment is a record of its international transactions with the rest of the world. It encompasses all transactions involving economic values that take place between resident and non-resident entities.