The components of Balance Of Payment (BOP) account are _________.

Key Points

• The Balance of Payments (BOP) account consists of two main components: the Current Account and the Capital Account.
• The Current Account records the inflow and outflow of goods, services, income, and current transfers.
• The Capital Account captures the inflow and outflow of capital, including investments, loans, and changes in foreign exchange reserves.
• The BOP account helps in tracking a country’s international economic position and determining whether it is in surplus or deficit.

Additional Information

• Option 1: Current Account Only: The Current Account is a critical component of the BOP, but it alone does not constitute the entire BOP. It includes trade in goods and services, primary income (such as profits, interest, and dividends), and secondary income (such as remittances and aid).
• Option 2: Capital Account Only: The Capital Account is another important component of the BOP, but it alone does not represent the complete BOP. It accounts for financial transactions like foreign investments, loans, and changes in foreign reserves.