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Indias Foreign Trade Policy Business Environment And International BusinessEasy

Which of the following statements is correct?

Correct Answer: A — Balance of trade is a part of balance of payment.

The correct answer is A: Balance of trade is a part of the balance of payment.

The Balance of Trade (BOT) forms part of the current account within the Balance of Payments (BOP). BOT measures the difference between a country's exports and imports of goods and services. If exports exceed imports, it is a trade surplus; if imports exceed exports, it is a trade deficit. BOP is broader, encompassing the current account (including BOT), capital account, and financial account.