Question

Balance of Payments ‘deficit’ is the excess of: (choose the correct alternative)

a. Current account payments over current account receipts.

b. Capital account payments over capital account receipts.

c. Autonomous payments over autonomous receipts.

d. Accommodating payments over a accommodating receipts.

Answer 1

The correct option is (c). Balance of payments deficit occurs when there is excess of autonomous payments over autonomous receipts.